January 2016 – Annual Commissions Review

Every January, Broker Monitor reviews the commission schedules of both the discount and full-service brokerage firms in our coverage group. In our review of discount and hybrid brokerages, we examine commissions for stock/ETF and option trades along with no-load mutual fund orders for all standard self-directed accounts. We also look at fixed-income commissions and outline rates for individual bond and CD products. To best convey this information, this month’s report is based largely around charts and matrices.

While discount brokerages regularly boast about their commissions, information for full-service brokerages is not as straightforward as clients might hope. Often, individual advisors are given significant freedom in how they assess commissions for their clients, taking into consideration an account’s value, the size of the order and the client’s overall relationship with the firm. To provide as even a comparison as possible, our full-service commission matrix compares standard commission rates for three different hypothetical trades of a specific common stock and includes a look at any trade or order fees. While commissions for advisory accounts are not an exact science, the information here provides a glimpse into what full-service firms are currently charging brokerage clients.

While the majority of Broker Monitor firms maintained the same commission pricing over the course of the past year, we observed some meaningful trends. There were no changes in stock or ETF online commissions charged by self-directed brokerages over the past year.

Additional key findings include:

  • Eight firms currently offer free trade promotions to entice clients to open a new brokerage or retirement account or to fund an existing account further.
  • Order handling fees for full-service firms continue to range from $4 to $6.
  • Four firms offer proprietary ETFs that are commission-free.Click to edit your new post…