Client Center
Financial Alternatives

Financial Alternatives News and Insights

Integrated Wealth Management

Scrutinizing Costs Leads to Chris Jaccard Being Quoted In the Wall Street Journal

Last week, Chris was researching Fidelity’s new commission-free ETF offering when he noticed the fine print: They will charge a fee if the ETF is sold within 60 days of its purchase date.

Shortly after researching this, Chris saw a press request stating that Kristen Grind from the Wall Street Journal was writing an article about Fidelity’s new program; so Chris decided to contact Kristen and express his opinion.

Chris’s Quote

Chris Jaccard, a financial adviser in La Jolla, Calif., said he was shocked when he learned of the new fee and called Fidelity to find out more. Mr. Jaccard is concerned the fee will make it harder for him to make bulk trades for clients.

"I was excited to see the commission waiver for a lot more funds, but then I started looking at the different links they had for further information and I noticed the fine print," he said.

Link to the Full Article

Cost Conscious

I’m not writing this blog post because Chris was quoted in the WSJ, but because this incident illustrates how much attention we pay to costs. This 60-day, $7.95 redemption fee will have a limited impact because we are not frequent traders. However, it is still something we must consider when managing our client portfolios.

Because of lower operating expenses, we often prefer to use Vanguard ETFs instead of other comparable ETFs. However, a client would have to pay at least $7.95 to buy or sell a Vanguard ETF. For larger positions this is not an issue, but for very small positions it is. So for some smaller accounts and trades, buying a commission-free ETF does make sense.

Changing Investment Custodians

It’s interesting to note that in the article one advisor said he would withdraw all $115 million of his client funds in iShare ETFs if Fidelity didn’t reverse its redemption fee. He said he is considering taking business to Schwab - which also offers some commission-free ETFs.

We have always believed it prudent to have multiple investment custodian options available to our clients so they can get the best combination of costs and services. If someone becomes dissatisfied with one custodian, we can quickly move to another custodian. We currently use Fidelity and Schwab and feel our clients receive excellent value and service from both of them.

As fiduciary investment advisors, we continue to scrutinize costs for our clients and always do what is in our clients’ best interests.