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Vanguard Eliminates Fees on Online Trading of Rivals’ ETFs

July 5, 2018

In a bid to attract new brokerage and financial advice business, Vanguard plans to eliminate fees on online trading of almost all of the 1,800 non-Vanguard ETFs on its platform, the Wall Street Journal writes.

The company already offers free trading on its own funds, the paper writes. For other ETFs Vanguard currently charges commissions based on account size and trading frequency, ranging from $2 to $20 per trade, according to the Journal. But in August customers will be able to trade online for free ETFs from Vanguard’s rivals such as BlackRock, Charles Schwab and State Street Global Advisors, according to the Journal.

Clients will still be charged for phone trades for these ETFs, however, the paper writes.

The move is part of Vanguard’s broader strategy to lure clients to its brokerage business as well as its financial advice offering, according to the Journal. The firm rolled out Personal Advisor Services in 2015 to clients with at least $50,000 and has so far attracted $106 billion in assets, Vanguard executives have said, according to the paper.

The company’s retail investor division, which includes its brokerage business, has $1.5 trillion in assets, the Journal writes.

“If we attract new investors, we have an opportunity to offer them advice over time,” Karin Risi, head of Vanguard’s retail investor group, tells the paper.

Vanguard isn’t the first to offer free online trading on rivals’ ETFs, the Journal writes. Clients of the brokerage unit of Fidelity Investments can already make free trades in 95 ETFs from Fidelity as well as from BlackRock, according to the paper.

By Alex Padalka
  • To read the Wall Street Journal article cited in this story, click here.