Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
Mind you, I have a brokeragelink account attached to my 401k/403b at Fidelity, but TRP funds are now NTF! I paid two TFs to purchase PRWCX (largest holding in that account, and one purchase was in the last few months). I hope it's not a glitch, and for everyone, I hope it's ALL Fidelity accounts! Didn't find this posted here or on M* yet. Pretty cool....
401k/403b accounts likely have other available allowances included. When attempting a test "buy" via a Fido IRA, the select function box doesn't display any choices; which would normally be buy, sell, trade, etc. This page link still indicates "closed to new investors".
Sorry, the PRWCX was just an example. Yes it's closed, I bought it before it WAS closed. The real news is that ALL T Rowe Price funds are now NTF. But, just like Vanguard (at non-Vanguard brokerages), I doubt Fido will reciprocate at TRP or elsewhere. I think the competition with TD Ameritrade, Schwab and others (started with ETFs, then trade commissions, etc) continues to benefit investors......'bout time.
Just understand that Fidelity did not make this change out of altruism. TRP is paying them to get on their NTF platform, probably in the neighborhood of 30-35 BPs, which is the standard cost to get on brokerage NTF platforms. Unless TRP is willing to absorb that cost, they will raise expense ratios for funds on the platform. I am not saying this is a bad thing, since I really like TRP, but this does carry a cost.
TRP is paying them to get on their NTF platform, probably in the neighborhood of 30-35 BPs, which is the standard cost to get on brokerage NTF platforms. Unless TRP is willing to absorb that cost, they will raise expense ratios for funds on the platform
@BobC, I agree that there is no free lunch. Added cost will pose performance drag. Probably won't see it in the near term, but the impact will be more obvious in the mid-long term.
For the heck of it I just checked PRDSX at Schwab, and it's NTF there also, but closed, of course. Still, that suggests that perhaps most or all of the TRP stuff is now widely available NTF.
Is this not invariably the case? In 45y I have never seen an NTF fund on Fido (or elsewhere) whose ER was not the same as buying directly from the fund family. OAKBX (say) through Fido same cost to me as OAKBX through Oakmark. Maybe I am missing something?
I just purchased PRGTX through Fidelity in my rollover IRA without a hitch even though it says "Closed to New Investors." Usually, it will not allow you to put in a buy request for a closed fund. I'm thinking this may be a mistake on Fidelity's part as the fund shows as open on TRP's website.
@Ted: Thanks for the info ! I believe Fidelity made a mistake on their webpage for this fund. The trade request was emailed to me just a little while ago. I'm sure it will go through at today's close.
@Old Joe: I was responding to willmatt72's purchase of PRGTX through Fidelity, not Schwab. If he had inquired about Schwab, I would have replied "Available to Existing Shareholders." Ted
Is this not invariably the case? In 45y I have never seen an NTF fund on Fido (or elsewhere) whose ER was not the same as buying directly from the fund family. OAKBX (say) through Fido same cost to me as OAKBX through Oakmark. Maybe I am missing something?
No, you are not missing a thing. When a fund increases their expenses to get on an NTF platform, the expense ratio increases no matter where it is purchased. ALL buyers share in the higher costs.
@Maurice- I wonder if you are not inadvertently obscuring a larger point? To my knowledge, TRP's funds were not previously available NTF at Schwab, either. Has TRP recently gone the NTF route with a number of brokers, or am I missing something here?
Picking up on BobC's comments, the ER will universally increase according to the costs involved with any NTF setup. Therefore, presumably, a fund's ER would vary according to the number of NTF brokers. (If, for example, TRP had made a deal only with Fidelity, an increase in the ER of "x" should follow; if the NTF deal was with two brokers, then it is logical that the ER would increase by "2x", etc.
hmm, are you saying that fund ERs rise inevitably from when they are in-house-available only? I wonder. I suppose it makes sense. I will try and track the history of D&C fund ERs from when I bought them 35y ago direct, although not sure I can do that, or know how, really.
In any case, what you (flatly) wrote was
>> they will raise expense ratios for funds on the platform
and I am saying I do not think that is the case, or have not seen it to be the case. My inference from what you say is that the ER would gradually increase with platform spread, and I know (limited experience) that not to be true with many funds, to the contrary, with some ERs decline (slightly) with growth of AUM. Right?
Has TRP recently gone the NTF route with a number of brokers, or am I missing something here?
TD has also been offering TRP funds NTF. My guess is for about two months, but I'm unable to confirm how long because TD doesn't have that information easily available when I asked.
Long term TRP funds holder (though made the mistake of selling PRWCX). Earlier directly, but via TDA for the last few years. TDA started offering TRP funds NTF for the last few years though I do not remember whether it 2 or 3 or 4 (have to check when I bough them - I bought some of them as soon as they were offered).
Has TRP recently gone the NTF route with a number of brokers, or am I missing something here?
TD has also been offering TRP funds NTF. My guess is for about two months, but I'm unable to confirm how long because TD doesn't have that information easily available when I asked.
Just checked my TDA account. I moved PRHSX from TRP to TDA in 2012, so it seems they are offered since 2012.
Very luck y with this fund. Bought a small amount ($2k) in 2011. Sold $3k since then and still hold 1.2k. Insignificant part of the over portfolio, but happy to see such a return.
Funds often have multiple share classes designed with additional fees to be sold NTF.
T. Rowe Price has "advisor class" shares, e.g. PAVLX (the 12b-1 version of TRVLX). Years ago I purchased $5K of an advisor class fund (costing me an extra $12.50/year, pre-tax) from a bank's brokerage in order to qualify for some service I wanted. I figured $9 bucks/year wouldn't break me. It still sells this share class.
This time, TRP is offering its "normal" retail shares NTF. ISTM that TRP might choose to absorb the platform costs because: (a) it may give them more AUM (could still be profitable, though less so than selling directly), (b) larger fund companies cut special deals with brokerages to reduce platform fees, and (c) there is some small cost savings for TRP by servicing a single omnibus account from each brokerage as opposed to servicing all the underlying accounts separately.
If you haven't seen Fidelity charge more than Schwab for the same fund, you haven't looked at N&B funds. Fidelity offers N&B "trust" shares NTF. These shares have an extra 10 basis point 12b-1 fee (and may add extra expenses on top of that), vs. the investor shares you'd buy directly from N&B or from Schwab NTF. For example, NBSSX is NTF at Schwab. If you want to avoid a transaction fee, at Fidelity you'll have to buy NBFCX; NBSSX carries a transaction fee.
Comments
When attempting a test "buy" via a Fido IRA, the select function box doesn't display any choices; which would normally be buy, sell, trade, etc.
This page link still indicates "closed to new investors".
https://fundresearch.fidelity.com/mutual-funds/summary/77954M105?type=sq-NavBar
Is this not invariably the case? In 45y I have never seen an NTF fund on Fido (or elsewhere) whose ER was not the same as buying directly from the fund family. OAKBX (say) through Fido same cost to me as OAKBX through Oakmark. Maybe I am missing something?
Regards,
Ted
Ted
Picking up on BobC's comments, the ER will universally increase according to the costs involved with any NTF setup. Therefore, presumably, a fund's ER would vary according to the number of NTF brokers. (If, for example, TRP had made a deal only with Fidelity, an increase in the ER of "x" should follow; if the NTF deal was with two brokers, then it is logical that the ER would increase by "2x", etc.
hmm, are you saying that fund ERs rise inevitably from when they are in-house-available only? I wonder. I suppose it makes sense. I will try and track the history of D&C fund ERs from when I bought them 35y ago direct, although not sure I can do that, or know how, really.
In any case, what you (flatly) wrote was
>> they will raise expense ratios for funds on the platform
and I am saying I do not think that is the case, or have not seen it to be the case. My inference from what you say is that the ER would gradually increase with platform spread, and I know (limited experience) that not to be true with many funds, to the contrary, with some ERs decline (slightly) with growth of AUM. Right?
Very luck y with this fund. Bought a small amount ($2k) in 2011. Sold $3k since then and still hold 1.2k. Insignificant part of the over portfolio, but happy to see such a return.
T. Rowe Price has "advisor class" shares, e.g. PAVLX (the 12b-1 version of TRVLX). Years ago I purchased $5K of an advisor class fund (costing me an extra $12.50/year, pre-tax) from a bank's brokerage in order to qualify for some service I wanted. I figured $9 bucks/year wouldn't break me. It still sells this share class.
This time, TRP is offering its "normal" retail shares NTF. ISTM that TRP might choose to absorb the platform costs because: (a) it may give them more AUM (could still be profitable, though less so than selling directly), (b) larger fund companies cut special deals with brokerages to reduce platform fees, and (c) there is some small cost savings for TRP by servicing a single omnibus account from each brokerage as opposed to servicing all the underlying accounts separately.
If you haven't seen Fidelity charge more than Schwab for the same fund, you haven't looked at N&B funds. Fidelity offers N&B "trust" shares NTF. These shares have an extra 10 basis point 12b-1 fee (and may add extra expenses on top of that), vs. the investor shares you'd buy directly from N&B or from Schwab NTF. For example, NBSSX is NTF at Schwab. If you want to avoid a transaction fee, at Fidelity you'll have to buy NBFCX; NBSSX carries a transaction fee.