Schwab Raises Fees for Buying Fidelity and Vanguard Funds“After years of fee wars with other brokers, Charles Schwab is pushing back. Starting on Nov. 1, the cost for retail investors to buy Vanguard, Fidelity, and Dodge & Cox funds at the broker will rise from $49.95 to $74.95—a 50% increase. Similarly, at TD Ameritrade, which Schwab acquired in October 2020, prices for the same fund families will rise from $49.99 to $74.95 on Oct. 1.
“Schwab's stated reason for this shift is covering its record-keeping and other administrative costs. ‘The majority of mutual fund families pay Schwab/TD Ameritrade for necessary and important shareholder servicing expenses, but some do not,’ says Alison Wertheim, a representative for Schwab (ticker: SCHW), in an email. ‘We are applying this different amount on retail mutual fund purchases only for funds from which we do not receive shareholder servicing compensation in order to offset the expense we incur in providing shareholder servicing.’ But is it a coincidence that Schwab is raising prices on two fund families with brokerage divisions that are its biggest competitors and the source of the fee wars?”
Excellent article. Delves into the history of the fee price wars, some of the causes and motivational factors and makes some inferences about where things may be heading.
- September 20, 2021 LINK
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