March 2017 – Annual Commissions Review

Each year, Broker Monitor reviews the commission schedules of both the discount and full-service brokerage firms in our coverage group, examining commissions for stock/ETF and option trades, no-load mutual fund orders, fixed income commissions and rates for individual bond and CD products. While discount brokerages frequently boast about their commissions with banner images, press releases and dedicated pricing pages, full-service firms do not make this information as readily available, as financial advisors are often given freedom in how they assess commissions for their clients, considering an account’s value, lot size and the client’s overall relationship with the firm.

For consistency, our review examines the commissions each coverage group firm charges for hypothetical trades of Facebook, Inc. stock as well as any associated handling fees. All full-service brokerages have increased their commission schedules from last year, which is likely in part due to the higher price of a single share of Facebook stock (approximately $114 last year versus $142 this year). These values vary considerably across firms. Conversely, discount brokerages have introduced a plethora of commission reductions. Six firms—Charles Schwab, E*TRADE, Fidelity, optionsXpress, TD Ameritrade and Scottrade—reduced trading commissions for stocks and ETFs. Five firms have reduced per-contract option prices as well.