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Advisors Embrace Commission-Free ETFs


Free is perceived to be, in most cases, so it is not surprising that registered investment advisors have been using commission-free exchange traded funds in client portfolios.

Charles Schwab (SCHW), TD Ameritrade (AMTD) and Fidelity are among the platforms used by RIAs that offer substantial line-ups of ETFs on a commission-free basis. Schwab rolled out its Schwab ETF OneSource platform earlier this year, offering 105 on a commission-free basis.

“From the February rollout through Sept. 30, $5.8 billion flowed into Schwab’s 105 commission-free ETFs. More than half of that has come from registered investment advisers,” reports Megan Durisin for Investment News.

OneSource has since grown to 121 ETFs after Schwab made 16 new additions last month. In addition to the entire lineup of Schwab ETFs, the firm’s clients can trade select ETFs from State Street Global Advisors, Guggenheim, PowerShares, ETF Securities and U.S. Commodity Funds commission-free. [Schwab Adds ETFs to Commission-Free Stable]

In an interview with Investment News, Beth Flynn, a vice president of head of third-party ETF platform management for Schwab, said the firm would like to expand OneSource in the future.

TD Ameritrade did not highlight flows to its 101 commission-free offerings, but the firm described the number as “healthy” to Investment News. The firm offers the iShares S&P 500 Core ETF (IVV) , Vanguard Dividend Appreciation ETF (VIG) and the PowerShares DB Commodity Tracking Index Fund (DBC) , among others, commission-free.

The firm did not indicate in the Investment News article whether or not it intends to expand its commission-free offerings.

Fidelity offers 65 iShares ETFs on a commission-free basis, including the popular iShares Select Dividend ETF (DVY) and the iShares MSCI USA Minimum Volatility ETF (USMV) . Fidelity’s recently introduced 10 sector ETFs are also available commission-free. [Fidelity's New ETFs Put Vanguard on Notice]

ETF Trends editorial team contributed to this post. Tom Lydon’s clients own shares of DVY.


The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.