Fidelity cuts online trading fees to zero, becoming the latest brokerage to make the move

Carmen Reinicke

October 10, 2019 1:11 PM

Fidelity Investments announced Thursday that it will cut fees on online stock, exchange-traded fund, and options trades to zero from $4.95.

FILE - In this Feb. 6, 2018, file photo, a woman walks through the front doors at a Fidelity Investments office on Congress Street as the ticker displays stock market numbers in Boston. Federal regulators are moving to require that brokers provide their customers with detailed disclosures of their potential conflicts of interest when dispensing advice for retirement planning and other investments. (AP Photo/Stephan Savoia, File)

The decision follows a slew of other brokerages who made the move earlier in October.
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The brokerage price wars continue to rage, and Fidelity Investments is getting in on the action.

The firm announced Thursday that it will cut fees for online stock, exchange-traded fund, and options trades to zero from $4.95, following in the recent footsteps of its competitors . The changes will take place October 10 for individual investors and November 4 for registered investment advisors.

The online brokerage is the latest to up the ante on the price wars shaking the industry. The rise of passive investing has pushed down the cost to trade, putting pressure on traditional brokerages to continue to add value for their clients.

The latest round of fee cuts has started a chain reaction. After Interactive Brokers announced zero fees in early October, it was quickly followed by Charles Schwab , TD Ameritrade , and E*Trade .

Fidelity also said it will continue to automatically direct retail investor cash into higher yielding alternatives for brokerage and retirement accounts, something the firm says makes it stand apart from competitors.

"With this decision, Fidelity is taking a different path from the industry," Kathleen Murphy, president of Fidelity Investments' personal investing business, said in a press release . "We are providing customers unmatched value while challenging industry practices that appear to give value in one place when they are actually having customers pay in other ways."

Fidelity is the largest online brokerage firm with 21.8 million accounts, and has opened nearly 10,000 new brokerage accounts each trading day this year, the company said.

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