Vanguard has joined the commission-free movement.
The Valley Forge, Pa.-based retail brokerage and asset management giant announced on Thursday that it would offer free online trading for stocks and options to all of its brokerage clients.
“Lowering the cost of investing is business as usual for Vanguard,” said Karin Risi, managing director of Vanguard’s Retail Investor Group, in a released comment. “For 45 years, we’ve been dedicated to lowering the cost of index and active funds, ETFs, advice, and brokerage services to help investors achieve better outcomes. The expansion of our commission-free platform marks the latest demonstration of this unwavering commitment to our clients.”
The decision follows Vanguard’s move in 2018 to a commission-free platform for nearly all ETF trading. Additionally, the firm has offered commission-free trading in its own ETFs since 2010.
Vanguard joins several large brokerages in dropping commissions on stock and ETF trading, led by Charles Schwab in October 2019 and later joined by TD Ameritrade, E*Trade, Fidelity and others.
While fees and commissions are being eliminated as differentiators, Vanguard notes that it is still competitive in other areas.
“The continued reduction and elimination of fees across the investment industry is a positive development for investors and one that Vanguard has long championed,” said Risi. “However, as we move to an environment in which ‘zeros’ dominate the headlines and explicit fees become implicit, we encourage investors to look more deeply at the total cost picture. Vanguard remains a vocal proponent of clear and transparent fee disclosure.”
In its announcement, Vanguard notes that its mutual ownership structure allows it to keep expense ratios low and return more of the benefits of its securities lending business to investors. The company also points to more than 60 expense ratio reductions made in 2019 alone, and a default brokerage sweep option that offers investors a 1.55% yield.