New ETF Transaction Fees Emerging in Some Brokerage Accounts
Brokers like Fidelity and Schwab begin charging fees from certain ETF issuers.
1Introduction
After years of zero-commission ETFs, brokers are shifting to a new fee model. Fidelity now charges investors a 'service fee' when buying ETFs from issuers that don't pay backend fees. This results in up to 5% additional costs per transaction for certain thematic ETFs, marking a significant shift in brokerage revenue strategies.
2Fidelity's Fee Structure
Fidelity imposes a 5% service fee (capped at $100) on over 100 ETFs from smaller issuers like Roundhill and LifeX. Major players like Vanguard and BlackRock remain exempt. The fee compensates Fidelity for platform costs when issuers don't pay asset-based fees. A PDF list on Fidelity's website details all affected ETFs.
3Schwab's Coming Changes
Charles Schwab is reportedly preparing to implement similar fees. According to RIABiz, Schwab may charge investors about $100 per transaction for ETFs whose issuers refuse to share 15% of their revenue. While unconfirmed, CEO Richard Wurster hinted at this model during recent earnings calls, with full implementation expected by Q1 2027.
4Other Brokers' Positions
E*TRADE and J.P. Morgan currently don't plan to charge investors directly. However, Morgan Stanley (E*TRADE's parent) reserves the right to delist ETFs from issuers not paying $150k annual minimum fees. J.P. Morgan may also restrict access to non-paying issuers' ETFs, though no such actions have been taken yet.
5Industry Transformation
JP Morgan analysts predict brokers may claim 10-20% of ETF expense ratio revenues, creating a new income stream in the zero-commission era. As Reuters reported, this reflects a broader industry trend where brokers seek alternative revenues after eliminating trading fees, potentially reshaping ETF distribution economics.
6Investor Implications
The fees primarily impact retail investors buying niche ETFs from smaller issuers. Investors must now verify whether their chosen ETFs incur additional transaction costs. Fidelity maintains an updated PDF list of fee-applicable ETFs, requiring more due diligence before trades, especially for thematic investment strategies.
7Conclusion and Outlook
This shift signals the gradual end of the zero-commission era as brokers recalibrate revenue models. More firms will likely adopt similar fee structures in coming years. Investors should reassess portfolio costs and trading strategies, particularly when accessing specialized ETFs, as the brokerage landscape undergoes its most significant change since commission-free trading began.
Original article: NerdWallet — Bazı Broker Hesaplarında Yeni ETF İşlem Ücretleri Ortaya Çıkıyor