Not everyone is a fan of the two-tiered pricing.
Robo adviser Wealthfront Inc. seeks partners “wholeheartedly committed to lowering investors’ costs,” Chief Executive Officer Andy Rachleff said in a recent blog post titled “Why We Avoid BlackRock ETFs.”
Rachleff, whose clients hold about $6 billion in ETFs and other products, said that if BlackRock cut its fees to match Vanguard’s across the board, it would cost the firm more than $500 million in profits. “BlackRock designed this ruse to maintain their profitability,” he wrote of the pricing policy.
Martin Small, head of U.S. iShares at BlackRock, said the company segments its business to cater to different clients and works with a range of customers to choose the ETFs “that best fit their investment objectives. That is good for our clients and our shareholders.”
This article was provided by Bloomberg News.