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9 things RIAs need to know about Fidelity's pricing moves on equities and ETFs

The trade commissions grab headlines but ETF cuts are a glimpse of the future

Author Brooke Southall February 3, 2010 at 5:25 AM
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Ron Fiske: You don't have to have that discussion with clients about what the right forum is to do business

Stephen Winks

Stephen Winks

February 3, 2010 — 5:46 PM

Now that advice is no longer incidental to trade execution, but trade execution is now incidental to advice, Schwab has started a chain reaction of events which will have a profound im pact on the industry going forward as evidenced by Fidelity following suite. This is just the beginning of what is comming, that will permanently change the industry’s competitive landscape.

Schwab’s move to waive ETF cost was a conscious and brilliant move to accelerates the industry’s move to address and manage investment and administrative values in the best interests of the consumer from the industry’s historical focus on commission sales of investment products.

The difference is, as the industry belatedly focuses on cost and the effectiveness of portfolio construction, it will gravitate toward (1) faster (real time transparency), (2)better (a much more disciplined approach with far superior results) and (3) cheaper (overlay management, real time buy/sell manager research and the tactical discipline to proactively manage risk exposure as market conditions change, all for less than 20 bps) approach to portfolio construction that will (1)better compensate advisors,(2)provide superior results at a (3)far lower cost consistent with fiduciary duty.

Doing more with less works. How would you like to make more money, better serve your clients with superior results and fiduciary standing and do so less expensively than a packaged product? It’s comming.


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Morningstar, Inc.
Top Executive: Joe Mansueto

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