TD Ameritrade new OEF pricing

rforno

Just received from TDA...

We are eliminating the sell-side Mutual Fund transaction fee. This means when you sell a mutual fund, there is no transaction fee.

We are reducing the standard buy-side Mutual Fund transaction fee to $49.95

However, the transaction fee for your purchases of funds from certain fund families that do not pay TD Ameritrade for record keeping, shareholder, and other administrative services on the shares purchased will increase to $74.95.

sma3

WOW I am sure Schwab will apply $75 fee across the board

JD_co

Those $20 mutual fund TFs at VGD and E*Trade look good by comparison.

Graust

Color me confused (thanks for the heads up, by the way):

1. Current fee is $49.99…so 4 cents?
2. I didn’t think they charged a fee for sales, except in the case of the 180-day holding period for NTF funds (which meant a single fee paid, not on the buys, but on sales); are they eliminating the 180-day holding period? Do you can buy an NTF fund, and then sell it whenever and not pay any fees?

Obviously these are mainly rhetorical, but if anyone knows, I would appreciate a reply here. Or I can call too haha.

Thanks @rforno

BaluBalu

Graust, NTFs are subject to STR fees in most mainstream brokerages and are true at TDA as well. I wish they decrease the 180 day period to 60 days like Fido and Vanguard. The no fees on sales posted above would be only for TF funds, which has been the case at Fido and Schwab. So TDA is conforming to Schwab pricing in that respect, I suppose.

BaluBalu

Rforno, what is the effective date of the revised fees structure you mentioned? Every place on the TDA site I looked it still shows the old pricing. I also checked Standard Retail Pricing: Commissions and Fees document revised 08/21 - TDA 4075 F 08/21. BTW, the $49.95, when effective, is consistent with Schwab pricing. I am more interested in the no fees on sales of TF funds.

MrRuffles

BaluBalu said:

Rforno, what is the effective date of the revised fees structure you mentioned? Every place on the TDA site I looked it still shows the old pricing. I also checked Standard Retail Pricing: Commissions and Fees document revised 08/21 - TDA 4075 F 08/21. BTW, the $49.95, when effective, is consistent with Schwab pricing. I am more interested in the no fees on sales of TF funds.

The email from TDA says the effective date is October 1.

rforno

BaluBalu said:

Rforno, what is the effective date of the revised fees structure you mentioned? Every place on the TDA site I looked it still shows the old pricing. I also checked Standard Retail Pricing: Commissions and Fees document revised 08/21 - TDA 4075 F 08/21. BTW, the $49.95, when effective, is consistent with Schwab pricing. I am more interested in the no fees on sales of TF funds.

Changes are effective 1 Oct.

carew388

So TDA still charges a $49.95 tf for non ntf funds and still maintains a 180 day holding period to avoid STR fees? For me, yawn... a big nothingburger. Make it a 9.99 tf and reduce the holding period to 30 days, and I'll reopen my TDA account in a heartbeat !

BaluBalu

Thanks, @rforno and @MrRuffles. Appreciate the follow-up and useful information.

fundly

I am in no way affiliated with Firstrade so I can report without hesitation after 1 year now, that I have been, for the most part ,happy with this account that allows every, yes every of the 11,000 funds on the platform NTF. Fees occur if a transaction occurs within 120 days if I remember correctly. I do not sell any positions less than 120 days anyhow. There have been a few hiccups ,but if anyone has issues with TF's this may be a solution. Customer service is not on the same level as with my other brokerages, Fidelity being one. But for no fees ,I am willing to put up with this issue .Many institutional and Vanguard Admiral funds have low entry amounts ,many at $500.

fundly

Forgot to add. Free cash management is available with a minimum 25K in the account. This has to be applied for separately and comes with checks, atm card,etc

carew388

Firstrade shows OSTIX MAPOX FPNIX DODIX GADVX available.... SVARX NTBAX not available. Does Firstrade show PRWCX and PACLX as open only to existing shareholders-just curious, thanks !

fundly

The available funds listed on the informational pages without an account is far from complete. With an account the available funds are many more. I own SVARX as a matter of fact and both this fund and PACLX are both available with $500 initial amount. The other 2 are available but closed to non shareholders. Hope this helps.

fundly

@carew388. goofed. SVARX and NTBAX both available. $500 minimum. PACLX and PRWCX both closed to non shareholders

carew388

+1 fundly Thanks for the info-quite a few funds available that I'm interested in. Possibly a brokerage to hold my Vanguard funds ,as well.

msf

Firstrade:

A Short Term Redemption Fee of $19.95 will be applied to redemptions of mutual fund shares held less than 90 days. Broker-Assisted redemptions will incur a charge of $19.95. Redemptions of less than $500 will incur a $19.95 fee, unless the entire value of that fund is less than $500. For mutual funds transferred to Firstrade, the 90 day holding period will begin when the account transfer process is complete.

https://invest.firstrade.com/cgi-bin/main#/content/customerservice/pricing/

Once one logs in, there's a fund screener that gives not 11,000 funds but 16,854 funds, of which 10,265 are described as no load, and 6,589 of which are called load funds.

Before Firstrade dropped all fund transaction fees, it charged no transaction fee for funds on its NTF list and for load funds (since it collected loads on those funds), while charging $9.95 for no load, TF funds. I'm inclined to think that all Firstrade did was remove the $9.95 charge on the TF funds but that it still charges loads on funds it labels load funds. Especially since it shows 6K load funds in addition to the 10K+ funds that are "no load".

NTBAX is one such fund. Firstrade lists it as open but as a load fund. However, it does also list NTBIX as a noload fund, albeit with a $25K min.

While you won't find NTBAX on the Firstrade's public pages, you will find its sister fund NAVAX / NAVCX there, displayed as a load fund. That gives you a good indication of how NTBAX is handled there as well.

Interestingly, you will also find its purported sister fund NDNAX /NDNCX listed. The problem is that this fund is defunct. Which suggests that the number of funds Firstrade is claiming is inflated, whether intentionally or not.

BaluBalu

@fundly,

Re your first post above mentioning that Vanguard Admiral shares are available at Firstrade, is this availability outside Vanguard limited to Firstrade or other brokerages also carry Vanguard Admiral shares?

Thanks.

fundly

@ Balu. Others do but I would imagine with transaction fees. My Wellstrade account is one. Because of the fees I use Firstrade for these Admiral funds. You would have to find out about others on your own research.

wxman123

msf said:

Firstrade:

A Short Term Redemption Fee of $19.95 will be applied to redemptions of mutual fund shares held less than 90 days. Broker-Assisted redemptions will incur a charge of $19.95. Redemptions of less than $500 will incur a $19.95 fee, unless the entire value of that fund is less than $500. For mutual funds transferred to Firstrade, the 90 day holding period will begin when the account transfer process is complete.

https://invest.firstrade.com/cgi-bin/main#/content/customerservice/pricing/

Once one logs in, there's a fund screener that gives not 11,000 funds but 16,854 funds, of which 10,265 are described as no load, and 6,589 of which are called load funds.

Before Firstrade dropped all fund transaction fees, it charged no transaction fee for funds on its NTF list and for load funds (since it collected loads on those funds), while charging $9.95 for no load, TF funds. I'm inclined to think that all Firstrade did was remove the $9.95 charge on the TF funds but that it still charges loads on funds it labels load funds. Especially since it shows 6K load funds in addition to the 10K+ funds that are "no load".

NTBAX is one such fund. Firstrade lists it as open but as a load fund. However, it does also list NTBIX as a noload fund, albeit with a $25K min.

While you won't find NTBAX on the Firstrade's public pages, you will find its sister fund NAVAX / NAVCX there, displayed as a load fund. That gives you a good indication of how NTBAX is handled there as well.

Interestingly, you will also find its purported sister fund NDNAX /NDNCX listed. The problem is that this fund is defunct. Which suggests that the number of funds Firstrade is claiming is inflated, whether intentionally or not.

I have been using Firstrade for years and happy with service overall. I can confirm that they do charge loads for load funds, but I still find they have the best selection of funds being offered at NTF AND institutional shares at low minimums in some cases.

msf

rforno said:

Just received from TDA...

However, the transaction fee for your purchases of funds from certain fund families that do not pay TD Ameritrade for record keeping, shareholder, and other administrative services on the shares purchased will increase to $74.95.

sma3 said:

WOW I am sure Schwab will apply $75 fee across the board

People may not be aware of how brokerages are compensated by funds, even TF funds, for shelf space. For example, Schwab discloses:

To compensate Schwab for various shareholder services, NTF Funds pay Schwab an asset-based annual fee, which usually equals 0.40% of the average fund assets held at Schwab but may be as high as 0.45%. ... When adding a new fund to Schwab’s NTF platform, NTF Funds also pay Schwab a one-time establishment fee.
...
Most [Transaction] Fee Funds pay Schwab a low annual asset-based fee, typically 0.10% annually of the average fund assets held at Schwab, although the fee can range up to 0.25% annually. ... When adding a new fund to Schwab’s platform, [Transaction] Fee Funds also pay Schwab a one-time establishment fee.

As a business decision, brokerages may decide to carry funds that refuse to pay even this "low" fee. Conversely, funds may make a business decision not to offer their funds on some platforms even if they are charged nothing. This is where the $75 fee kicks in and why you can't get Admiral shares on most platforms.

“Vanguard doesn’t compensate us for the services we provide,” a Fidelity spokeswoman told Barron’s. “That’s why there’s a higher transaction fee for its funds,” she added, referring to the $75 fee that Fidelity charges to buy a Vanguard fund, well above its normal $49.95 rate.
...
Maintaining the exclusive rights to sell its low-cost Admiral shares for active funds is one way to prevent firms like Fidelity or Schwab from poaching client assets. “Vanguard is saying, ‘Why should we offer our best priced item on someone else’s shelf when we want investors to stay with us?’” Daniel Wiener, editor of monthly newsletter The Independent Adviser for Vanguard Investors, tells Barron’s.

https://www.barrons.com/articles/vanguard-lowest-cost-funds-fidelity-retirement-schwab-51556315451 (April 28, 2019)

msf

wxman123 said:

I have been using Firstrade for years and happy with service overall. I can confirm that they do charge loads for load funds, but I still find they have the best selection of funds being offered at NTF AND institutional shares at low minimums in some cases.

Firstrade is great for access to shares that you can't get elsewhere. I used it for years to get Franklin-Templeton's lower cost Advisor class shares.

While it's not as bare bones as it was when I was a customer, it's still not a brokerage I'd use as my primary institution. It doesn't make ATM reimbursements (and charges foreign transaction fees except for one per month), and has check printing fees, ACAT transfer fees, and limited phone hours (M-F). They don't seem to offer mobile deposits. IMHO none of which is significant for a secondary brokerage.

The main question in my mind is how long the free fund trading will last. I'm repeating myself here: we've seen similar programs sent off to the dustbin of history including Welltrade, Scottrade, and Scudder Retirement Plus. Though even if it brings back its $9.95 charge per trade, that's little more than a nuisance fee and not much more than the $5 that Fidelity charges for incremental investments in TF funds.

fundly

@MSF. Agree with all your points. Firstrade is not my primary brokerage and as you have noted my Scudder and Wellstrade free trades went into the dustbin of history. My understanding though is that at Fidelity you would have to set up recurring investments in a TF fund to get the $5 fee. Then you would have to discontinue this with every purchase and repeat with the next one. If this is true I would continue with Firstrade until their fee changes. But if the above is true regarding Fidelity $5 purchases I would be happy to pay a 9.99 fee to not have to continually monitor all this at Fidelity. As usual ,thank you for your input on the forum.

BaluBalu

Thanks, @msf, for the detailed post. Just an FYI - a few years ago, I tried to convert at Schwab investor class shares of a Vanguard active fund into Admiral shares and it was not possible and I had to move the investment to Vanguard. So, it is possible the Fristrade availability of Admiral shares @fundly mentioned is limited to Vanguard index funds.

fundly

Both index and non index funds are NTF. One example ix VWIAX which I own. Minimum is $500.

LewisBraham

My question with Firstrade is how long before they end this policy of NTFs or they get acquired by another broker that doesn't have this policy?

fundly

Just enjoying the party until it ends! Hopefully not for some time.

BaluBalu

@fundly, Thank you for the additional info.

carew388

+1 Lewis My thoughts exactly-ntf policy seems too good to be true(or continue)!

fundly

It not take long. I found out today that I could no longer purchase my. Vanguard Admiral funds any longer at Firstrade. Only sales are now permitted in those funds without a fee. Wanted to update my previous posts. May have to transfer the funds back to Vanguard.