Online brokers pass along fees to investors only when the broker doesnt receive a fee from a fund. When funds pay these brokers a fee, they generally make the funds available to investors without a commission.
By paying half of these commissions back to investors, E*Trade will not only become one of the cheapest places to buy funds, but it could even be less expensive for investors to buy a fund through E*Trade than directly from the fund company, according to TheStreet.com.
Then again, E*Trade and other discount brokers have only gained a small market share compared to the fund supermarkets of
Thus, it remains to be seen how much of an increase in assets and customers this rebate brings E*Trade. Furthermore, whats good for investors might not be good for fund companies, and if they see their own fees decrease, they might leave the E*Trade family.
