Raymond James Financial Inc. is preparing to offer exchange-traded funds free of transaction fees, ratcheting up its competition for assets against similar programs in place at Charles Schwab Corp and TD Ameritrade Holding Corp.

The St. Petersburg, Florida-based company is to begin offering nearly 120 commission-free ETFs next month to its affiliated registered investment advisors, or RIAs, and their clients, Mike DiGirolamo, managing director of Raymond James' Investment Advisors Division, said on Tuesday.

"It's only natural that RIAs who are engaging predominantly in fee-based relationships are going to look for low-cost investment products" like ETFs, said Chicago-based Morningstar analyst Ben Johnson. "It makes sense that (Raymond James) would want to offer such a feature on their platform," he said.

Raymond James has been looking to grow assets in its RIA division, which includes about 110 RIA firms and more than $10 billion in assets, but is just a small part of its broader advisor network. Total client assets at Raymond James are about $485 billion.

At the same time, RIAs have become an increasingly key part of growth in the ETF market. In a Greenwich Associates study of institutional ETF investors earlier this year, 41 percent of the 70 RIAs surveyed said they invest more than a quarter of total assets in ETFs.

Raymond James' initial slate of offerings, which are expected to become available Nov. 1, will focus largely on actively managed ETFs, unlike the platforms at Schwab and TD Ameritrade.

"We had seen that their (RIA's) direction seems to be more towards actively managed ETFs," DiGirolamo said in an interview, noting that advisers had been asking for a no-transaction-fee ETF platform. "It really is a great opportunity for clients, to lower the cost to both the adviser and client," he said.

The first funds on the Raymond James platform will include those from ETF providers First Trust, AdvisorShares, ALPS Advisors and Greenhaven. The ETFs were selected based on their suitability for complementing or hedging client portfolios, the company said, as well as to lower the cost of trading.

DiGirolamo said Raymond James is also planning to launch a second group of 50 to 100 commission-free ETFs in early 2015.

For the ETF sponsors that partner with the firm it is a way to expand their distribution to clients on Raymond James' platform.

Schwab last month announced it was expanding its own commission-free ETF platform with 65 new offerings, including a handful of alternative funds, citing demand from customers who want to invest in ETFs without paying online trade commissions.