Fidelity Institutional lowers fees for financial advisers trading on its platform

Starting Jan. 1, they’ll save 25% for buy and sell transactions on most funds

Dec 5, 2013 @ 12:13 pm

By Trevor Hunnicutt

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Fidelity Institutional Wealth Services is lowering fees for advisers who trade on its platform — for the most part.

Starting Jan. 1, Fidelity will lower to $30, from $40, the standard pricing for a buy or sell transaction on its FundsNetwork platform, a 25% saving. But the custodian is also raising buy fees by 25% to $50 on five fund families, including the popular offerings from the Vanguard Group Inc., according to spokeswoman Erica Birke.

The fee shift signals the Fidelity custody division’s intent to heat up competition, especially with the larger Schwab Advisor Services and TD Ameritrade Institutional, in the aftermath of a corporate reorganization in July that saw the firm streamline its businesses for independent advisers, broker-dealers and other affiliates.

Fidelity is the third-largest independent adviser custodian by clients. Its platform provides access to more than 20,000 mutual funds.

The fund families that will be hurt by the price increase, which was first reported by RIABiz, are Dimensional Fund Advisors, CGM Funds, Dodge & Cox Funds and Sequoia Funds. Sell fees on those funds, however will be decreased to $30.

“These specific fund families … are not compensating Fidelity for the shareholder services that we perform on their behalf,” Ms. Birke said.

Managers of the affected funds could not be immediately reached for comment.

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