Firstrade to Start Charging Fees for Mutual Fund Investments
Post viewed 652 times, 3 so far today
I got this email from Firstrade today, but somehow the date of the message shows February 7, 2007. While the message began with an exciting tone by saying “We are pleased to announce that Firstrade now offers over 10,000 mutual funds,” What it really wants to tell me, as well as all other investors (existing or potential) who have invested or planed to invest with Firtrade, is not a piece of good news:
Starting on April 2, 2007, please be advised of the following changes to our mutual fund policy at Firstrade:
- A $9.95 commission will now apply to No-Load mutual fund trades. This allows us to maintain the lowest mutual fund rate in the online brokerage industry.
- No Transaction Fee (NTF) and Load funds will remain commission free.
- The early redemption period has been decreased from 180 calendar days to 90 calendar days.
Though they still offer No Transaction Fee (NTF) funds, a quick check on what exactly are defined as NTFs shows the choices are very limited. For example, funds from popular fund families such as Dodge & Cox, T. R. Price, and Vanguard all now become No-Load mutual funds, meaning that investors have to pay $9.95 for every transaction. Actually, Firstrade now has 188 fund families in the No-Load category, while only 68 fund families belong to the NTF group.
More than four years ago, when Scottrade started to charge fees to some no-load mutual funds, Firstrade were mentioned by lot of investors as an alternative because of the fee-free mutual fund trading at Firstrade. Now, it seems this also comes to an end. If everybody else in the brokerage industry charges fees for mutual fund trading, we shouldn’t really be surprised to see Firstrade changes course. After all, we have to invest with somebody.
If you enjoyed reading this post, please consider subscribing to my full RSS feed (What's RSS feed?). Or you can also choose to have free daily updates delivered right to your inbox.
Featured Financial Products
- Seeking higher returns for your cash? Take a look at the latest interest rates from leading online banks and find out where to get the most for your money.
- Earn up to 5% cash back from these cash back credit cards while shopping at gas stations, grocery stores, or online.
Related Posts
- Switching from Firstrade to Tradeking
- IRA Guide: You Don’t Have to Know Everything to Have an IRA Account
- Investing with Small Amounts: Stocks or Mutual Funds?
- Guest Post at Generation X Finance
- “How to Invest When You’re Young”
Trackbacks & Pingbacks
- Pingback by Switching from Firstrade to Tradeking | The Sun’s Financial Diary | A Personal Finance Blog on Saving and Investing on December 4, 2007 @ 11:01 am
4 Comments
Share Your Thouhgts
Your opinion matters. Please use the form below to share your thoughts on Firstrade to Start Charging Fees for Mutual Fund Investments with us.Recent Entries
- Boy, Was I Wrong on FRE
- Avoid These Unhealthy Kid Foods
- Suze Orman FICO Kit 20% off Sale
- Poll: Do You Save in 401(k) Without Company Match?
- Weekend Linkage - August 17, 2008
- It’s Not Easy to Live in New Jersey
- Discover More Card $50 Bonus Promotion
- Past Performance of My All-ETF Portfolio and A Little Modification
- Creating a Virtual All-EFT Portfolio
- Weekend Linkage - August 10, 2008
- IGoChecking Gives $50 Gas Cards for New Accounts
- The Wait Is Over. Let’s Party!!!
- 401(k) Debit Card Is NOT a Good Idea
- Firstrade Referral Bonus Sharing Program
- Chinese ADRs Monthly Update - July 2008
- 10 Hottest Mutual Funds in 2008
- Protect Yourself and Your Money Against Bank Failures
- Weekend Linkage - August 3, 2008
- TradeKing Promotion: Get $50+$20 Bonus When Opening a New Account
- Emigrant Direct and WT Direct Interest Rate Update
- July 2008 Score Card — Part I: Net Worth
- WaMu Online Savings Account Now 3.75% APY
- EverBank Direct President Answers Some Questions about EverBank
- Did You Splurge?
- What are My Investments and How are They Doing So Far?
Loading ...
My current thinking is to switch to WellsFargo and get the 100 free trades a year (includes no load mutual funds not in their NTF programs). Should be enough for me to get by — until WF decides they need to increase fees. Then it’ll be another switcheroo to someplace else.
I don’t know your trading strategy, but I myself don’t like switch brokerages despite that I am using quite a few right now. The WF promotion seems to be interesting, but they still have a minimum requirement of $25K to get the free trades. 100 free trades are a lot in one year (nearly two a week). This is good for stock/ETF trading, but not for mutual funds as mutual funds are supposed to be long term investments. Currently their real-time mutual fund trading has a fee of $35, which is very high compared with other discount brokerages. If you decide to take this promotion offer, what do you want to after one year? Keep you account with them? Or transfer the account out? For me, Getting 100 free trades doesn’t warrant a long-term relationship with them.
My current IRA balance at E-Trade is easily enough to meet the 25K limit for the 100 free transactions per year. Mutual fund transactions are covered as part of the freebies. Meeting the 25K requirement also drops all transactions afterwards to only $5.95 whether it’s stock, ETFs or mutual funds. This would let me DCA into roughly 8 different ETFs and mutual funds per month for no charge — very handy for consolidating my non-Vanguard investments under a single umbrella.