Back in 2015 when we moved your investment accounts to TD Ameritrade, we had a choice. Our choice was to pay trading fees for all of our clients OR to have our clients pay for the trading fees on their own accounts. We decided to have our clients pay the trading fees on their accounts for two reasons. (1) If we paid the trading fees, we felt we would have a conflict of interest to trade your account. Meaning that every time we placed a trade, it would cost thousands of dollars and we wanted to focus on the profitability of the trade for you, not worrying about the cost we would pay as your advisor. (2) We felt that trading fees would be reducing over time and wanted you to be the beneficiary of those cost savings. In 2015, TD Ameritrade had a small handful of ETF’s that were free to trade. Since 2015, that number has grown to hundreds of ETF’s that were free to trade. In addition, the cost to trade an ETF dropped from $9.95 per trade, to 8.95 per trade, to most recently, in August, to $5.95 per trade.
Because of our decision to have you pay your trading fees, each of those reductions from TD Ameritrade has gone to your pocket, instead of a pay raise to us. It’s part of our transparency when doing business with you. We were excited by yesterday’s announcement from TD Ameritrade to reduce the cost to trade an ETF or stock to $0 per share. We knew this was a big cost savings for you. We hope you feel the big grin on our face realizing we made the right decision years ago. (But who knew it would happen this quickly… Just five short years!)