Following the lead of Charles Schwab and TD Ameritrade, Fidelity announced that it too would eliminate the $4.95 commission on trades, including for RIAs. But the custodial firm offers something the others don’t.
Fidelity does not sell trade order flow. Since 2015, Fidelity has directed retail investors’ cash into a higher-yielding money market account. The service was also made automatic for retirement accounts earlier this year. As a result, Fidelity doesn’t make up the lost revenue by selling order flow to exchanges.
The commission changes took effect for individual investors on Thursday, Oct. 11. The changes for registered investment advisors will take effect on Sunday, Nov. 9.