Vanguard latest to offer zero-commission stock trades

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Will any investor pay commissions ever again?

A bit over the top, to be sure, but one could be forgiven for dreaming of a commission-free world given how many firms have been slashing their way zero.

The latest move came from Vanguard, which expanded commission-free online trading for stocks and options to its brokerage clients. The fund giant’s commission-free platform already included all Vanguard mutual funds and ETFs as well as thousands of third-party funds.

“The continued reduction and elimination of fees across the investment industry is a positive development for investors and one that Vanguard has long championed,” Karin Risi, managing director of Vanguard’s retail investor group, said in a statement.

Vanguard says it plans new enhancements for its brokerage platform, including a new trade path, an updated online experience and a redesigned mobile app.

In recent years, a number of asset managers and other firms have cut commissions for clients. Robinhood, an online trading app, has offered commission-free stock trading for years but Schwab caused something of a ripple effect across the industry when, in October, it cut fees on stock trades to zero from $4.95 per trade. Competitors such as TD Ameritrade and E-Trade soon followed suit (Schwab has since announced it plans to purchase TD Ameritrade for $26 billion).

Vanguard, long a leader in low-cost investing, says it encourages investors to consider features beyond commissions, such as account minimums and fees (its brokerage platform doesn’t have minimums or charge fees for clients who accept e-statements, the firm says).

“Lowering the cost of investing is business as usual for Vanguard,” Risi said.

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