TD Ameritrade to offer commission-free ETF trades on 100 funds

Brokerage TD Ameritrade has begun offering commission-free ETF trades on more than 100 different funds that have been chosen by Morningstar. "We're offering ETFs from several leading sponsors," said Matt Judge, director of wealth management solutions, in an interview this morning, shortly after the program officially went live. The launch of the TD Ameritrade ETF Market Center comes roughly five months after Vanguard announced it too would offer commission-free ETF trades. "We're getting no special compensation from fund families," Mr. Judge said, in contrast to an undisclosed amount of revenue-sharing that iShares, for example, is paying to Fidelity for a similar no-commission ETF program. Charles Schwab Corp. also offers free trades, but only with its proprietary ETFs. "Our goal is to provide the most choice to build a properly diversified portfolio,” Mr. Judge said. “We don't want to lock people into a particular [ETF].” The program will be available for both TD Ameritrade's discount brokerage customers and advisers who custody at the firm. "Both channels are seeing increased use of ETFs," Mr. Judge said, estimating that almost 80% of advisers are currently using ETFs in at least some client portfolios. TD Ameritrade CEO Fred Tomczyk said his company's new ETF offerings are designed to help investors build long-term investment portfolios more cost effectively. As part of the new program, the ETFs must be held longer than 30 days, or clients will pay a short-term redemption fee of $19.99. —The Associated Press contributed to this story