Wells Fargo eliminates commissions from stocks and ETFs on WellsTrade

Wells Fargo eliminates commissions from stocks and ETFs on WellsTrade
The self-directed trading platform is the latest to announce zero-fee trades as the industry embraces a new business model.
DEC 10, 2019
The wave of zero-fee trading kept coming Tuesday with Wells Fargo Advisors dropping commissions on stocks and ETFs from WellsTrade, its self-directed trading platform. The move comes one day after Bank of America announced it would eliminate commissions from its trading app, Merrill Edge. While the "domino effect" started by Charles Schwab in October played a role in Wells Fargo's decision, Joe Nadreau, Wells Fargo Advisors' head of independent brokerage and platform services, said the firm was already moving in this direction. The bank has another offering with free trades, and commissions on WellsTrade were down to $2.99. [Recommended Video: Will the Race to Zero drag other services to zero as well?] "It's not a big leap for us," Mr. Nadreau said, adding the firm just wanted to make sure it had "all its ducks in a row" before making the move final. In its recent earnings report, Wells Fargo reported income of $2.3 billion from "brokerage advisory, commissions and other fees." While the firm wouldn't specify how much of that consists of commissions from self-directed online trades, Mr. Nadreau said it's a single-digit percentage with small overall impact to Wells Fargo Advisors. "We're giving up revenue from a component of the business that has been in a continued free-fall decline for a decade and replacing it with planning, advice offerings and lending where appropriate," he said. "I think if you do that correctly, it will more than offset the limited revenue given up." WellsTrade will still charge commissions to trade options and penny stocks. Mr. Nadreau said this decision was intentional to avoid incentivizing do-it-yourself investors from playing with investments that may be too advanced. The move also won't impact trading costs associated with Wells Fargo Advisor's platform for financial advisers. Mr. Nadreau hopes this further encourages advisers to build portfolios grounded in achieving financial goals rather than transactions. "More and more money is managed money, and more and more of a relationship is not based on the adviser's ability to pick stocks better than the guy or girl next to him," Mr. Nadreau said. "We really focused on driving more of a planning-oriented culture than a trading culture."

Latest News

Tocqueville Asset Management expands business with $1.3B AUM acquisition
Tocqueville Asset Management expands business with $1.3B AUM acquisition

The 40-year-old independent investment partnership picks up high caliber team.

New York RIA, former rep combined $225K by SEC for breaching fiduciary duties
New York RIA, former rep combined $225K by SEC for breaching fiduciary duties

Elderly clients impacted in transfers to higher-fee advisory accounts.

Do we need a new word for retirement as fewer people give up work?
Do we need a new word for retirement as fewer people give up work?

Another study highlights the oversized share of older Americans still working.

Investors' risk-on appetite reaches 15-year high
Investors' risk-on appetite reaches 15-year high

BofA survey reveals bullish sentiment.

World's first catastrophe bond launched by ex-Pimco exec
World's first catastrophe bond launched by ex-Pimco exec

Rick Pagnini wants to demystify cat bond investments.

SPONSORED Record growth: Interval funds emerge as key players in alternative investments

Blue Vault Alts Summit highlights the role of liquidity-focused funds in reshaping advisor strategies

SPONSORED Taylor Matthews on what's behind Farther's rapid growth

From 'no clients' to reshaping wealth management, Farther blends tech and trust to deliver family-office experience at scale.