Morgan Stanley It was announced yesterday E * business The platform has eliminated trading commissions and pre-redemption charges for all mutual fund online transactions.
The fee change, effective immediately, will expand E*Trade’s commission-free offering, which includes U.S.-listed stocks, exchange-traded funds and options, according to E*Trade’s website.
E*Trade says it has access to more than 6,500 mutual funds. Although most no-load mutual funds have been commission-free on the platform, yesterday’s change eliminates a $19.99 fee for trading mutual funds and a $49.99 redemption fee for early sales, Morgan Stanley said. spokesman.
Free mutual fund transactions are nothing new in the online brokerage space. Schwab And Loyalty It says – among many – offer commission-free transactions for selected funds on their platforms Michael WongDirector of Financial Services Equity Research, North America, b Morningstar Research Services.
But Wong added that commission-free mutual fund transactions may be less attractive to e*Trade clients who have smaller accounts and trade more frequently than clients on other direct investor platforms.
“Of course, E*Trade has fewer clients than some online brokers and commissions can be a deterrent for those investing relatively small amounts. This could be an attractive proposition for long-term investors investing in smaller amounts, which is a different audience than the traders that E*Trade is generally more associated with, said Wong in an email to FA-IQ.
The move comes as Morgan Stanley looks to use the partnership to help drive growth in the traditional advisory channel.
Morgan Stanley acquired E*Trade in 2020. When the deal was announced, the unit represented about 5.2 million brokerage accounts and $360 billion in client assets, Financial Advisor-IQ’s sister publication Ignites reported at the time.
In a recent quarterly earnings call, Morgan Stanley CEO James Gorman E*Trade and its pension division have been called an “incredible income machine” that serves as a funnel for new clients that Morgan Stanley has been ignoring. The wirehouse is betting on the idea that some of the smaller direct investors have larger assets elsewhere — perhaps with rival consulting firms.
Recent service enhancements include increased free access to Morgan Stanley’s global research for e*trading, greater access to initial public offerings and enhancements to core portfolio robo-advisory services, Morgan Stanley said.
In October, Morgan Stanley announced that its own digital advisory service, Morgan Stanley Access Investing, would be merged into E*Trade and closed to new clients.
“Joining Morgan Stanley’s ability to add mutual funds to our e*commerce no-commission offering is extremely beneficial to our clients as we strive to provide the best investment experience possible.” Chad TurnerMorgan Stanley Wealth Management’s head of digital direct channels, said in a press release announcing the payment had been removed.
Morgan Stanley As of the quarter ended Sept. 30, 7.8 billion self-directed clients had a total of $829 billion in assets, according to the firm.