Merrill Lynch expands free trades for majority of online clients

Merrill Lynch expands free trades for majority of online clients
Bank of America does away with limits on free trades for many during industry price war.
OCT 21, 2019
Joining the race to eliminate commissions for online stock trades, Bank of America Corp.'s Merrill Lynch unit is tossing out limits for free trades for certain clients who use online or mobile platforms. The bank on Monday said it was expanding its zero-dollar online trades, offering unlimited and commission-free stock, exchange-traded fund and option trading to clients with a Bank of America checking account and at least $20,000 in cash or securities who are part of its "preferred rewards" program. Prior to this, those customers had a limited number of free trades each month; the minimum was 10 and maximum 100. [Recommended video: Aaron Klein: New tools will help investors trade through the Riskalyze lens] That program currently has about 6 million clients, but another 4 million could immediately qualify, said Aron Levine, head of consumer banking and investments at Bank of America. He said Merrill Lynch started offering zero-dollar trades to certain clients in 2006 and has steadily expanded the program since then. Meanwhile, customers who use the online brokerage platform, Merrill Edge Self-Directed, who are not registered in the preferred rewards program will see prices for online stock, ETF and options trades cut from $6.95 to $2.95 with no minimums. "Eighty-seven percent of trades are free with online and mobile," said Mr. Levine. "More importantly, we've been looking at this for years. It's not a purely investment-focused relationship with the client but one across banking, lending and investing." Charles Schwab Corp. was the first to make the move to erase commissions on certain online trades at he start of this month. It was quickly followed by TD Ameritrade Holding Corp., E*Trade Financial Corp. and Fidelity Investments. Although it may have been widely expected, Schwab's move has clearly shaken up the financial advice industry. Whiles trading has become a commodity for many brokerage firms, commissions from trading are still a significant piece of revenue for some broker-dealers.

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