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Schwab drops stock trading commissions as fee war escalates

Business
Charles Schwab

FILE – This July 14, 2010, file photo, shows a Charles Schwab office in Oakland, Calif. Charles Schwab is dropping commissions for online trading of U.S. stocks and exchange-traded funds, the latest slash in an industry battle that’s drastically cut the cost of investing. The announcement on Tuesday, Oct. 1, 2019, sent shares of other brokerages plummeting. (AP Photo/Paul Sakuma, File)

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NEW YORK (AP) — Charles Schwab is dropping commissions for online trading of U.S. stocks and exchange-traded funds, the latest slash in an industry battle that’s drastically cut the cost of investing.

Tuesday’s announcement sent shares of other brokerages plummeting. TD Ameritrade lost 25.8%, its worst day in 13 years. ETrade Financial lost 16.4%. Schwab fell 9.7%.

Schwab said commissions for mobile and web trading of stocks and ETFs listed in the U.S. and Canada will drop to zero from $4.95 on Monday.

The industry has been slashing fees across investments for years, as customers demand lower expenses. Stock mutual funds last year kept $55 in fees for every $10,000 invested, according to the Investment Company Institute. That’s down from $100 in 2003.

Copyright 2020 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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