TD Ameritrade becomes the latest broker to eliminate fees - and its free stock trades will be available before Charles Schwab's
AP Images / Richard Drew
- TD Ameritrade announced Tuesday it would cut fees to zero for online stock and exchange-traded fund transactions. It made the announcement after Charles Schwab said earlier in the day it was cutting fees.
- The firm's price change will go into action this Thursday, while Schwab's begin on Monday, October 7.
- Charles Scwhab's initial announcement spurred sharp selling across the brokerage industry. Shares of TD Ameritrade closed down 25%, while E*Trade fell 16% and Charles Schwab lost 9%.
- Watch TD Ameritrade trade live on Markets Insider.
The price wars between brokerages are heating up.
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"We expect this decision to have a revenue impact of approximate $220-$240 million per quarter, or approximately 15-16% of net revenues," said Steve Boyle, chief financial officer of TD Ameritrade in a statement. He said more information about the fiscal 2020 plan will be released during fourth quarter earnings, due later in the month.
The free trades, and a final pricing schedule, will be available Thursday for retail clients, and clients of independent registered investment advisors that use TD Ameritrade's institutional offering. TD Ameritrade has more than 11 million clients and $1.3 trillion in assets.TD Ameritrade is down 31% year to date.
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