Pershing “actively” considers launching commission-free ETF platform

Custodian considering jumping on bandwagon popular with RIAs as other platforms grow big.
OCT 23, 2014
A top Pershing executive said Wednesday the firm is considering a commission-free trading platform for exchange-traded funds. “We're actively looking at that as a further potential solution, evaluating many things including the economics of the program,” said Sandy Bolton, managing director of financial solutions at Pershing. “We want to ensure when we launch a program like that, that it is a robust platform.” The announcement comes as commission-free ETF platforms offered by competitors such as the Charles Schwab Corp., Fidelity Investments and TD Ameritrade have grown massively. (Related: Schwab expands commission-free trading platform for ETFs) Generally, fund providers pay for access to those platforms and realize a large percentage of their flows from having done so. For instance, a Fidelity spokesman said that in the 16 months after Fidelity began offering 65 iShares funds commission-free, in March 2013, flows to those ETFs grew 134% compared with the 12 months prior to those ETFs being commission-free. Schwab's platform, called ETF OneSource, has $31 billion in assets. Funds offered without a commission account for about half of all ETF flows at Schwab. A TD Ameritrade executive declined to comment on the assets in its program.

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