Why I'm Not Expecting TD AMERITRADE to Drop Its Trading Commissions

• Report this Comment On June 28, 2011, at 4:11 PM, twolf2919 wrote:

  Are you sure you E-Trade charged $12.95/trade before this 'price war'? I am not an active trader, but I've paid $9.95/trade for years. I just verified it by looking at some transactions from 2009.

• Report this Comment On June 28, 2011, at 7:05 PM, minimumwage wrote:

  wow. I guess now we have to read advertisements in article form rather than just ignore banners or pop-ups.

• Report this Comment On June 28, 2011, at 7:47 PM, peters46 wrote:

  I took my dollars elsewhere. They had this requirement that customers must have security questions. But in order to have security questions, I had to be on a private computer. At the time I had no access to a private computer and had to go thru the library. TD Am kept harrasing me, threatening to shut off my access to my account. They refused to work around that with me somehow. Harrasment by itself was bad enough, but total lack of service (willingness to work something out) was the tipping point.

• Report this Comment On June 28, 2011, at 8:08 PM, TMFBrich wrote:

  @twolf2919,

  It could be that you qualified for a promotional rate or had sufficient assets. Here's the Reuters piece detailing the price cut from last year: http://www.reuters.com/article/2010/02/05/us-etrade-fees-idU...

  <<(Reuters) - E*Trade Financial Corp (ETFC.O) will cut trading fees for low-volume customers, the U.S. online brokers said on Friday, making its move in a pricing war that erupted among rivals in recent weeks. The company said all customers will pay $9.99 or less for a stock or options trade, down from $12.99, starting on Monday.>>

  Foolish best,

  Brian Richards

• Report this Comment On June 28, 2011, at 8:10 PM, TMFBrich wrote:

  @minimumwage,

  Sorry you feel that way. I'll just say, amidst falling prices at most other brokerage houses, I found it interesting that AMTD has decided to stand pat, and as I say above, I think they'll play up the value prop of their offerings rather than trying to be the lowest-cost provider.

  -Brian Richards

• Report this Comment On June 28, 2011, at 8:12 PM, TMFBrich wrote:

  @peters46,

  Thanks for sharing the story. If you're willing to say, which broker did you take your business to?

  Foolish best,

  Brian Richards

• Report this Comment On June 28, 2011, at 8:45 PM, nasis wrote:

  This year my brokerage, Zecco, took the "price war" in the other direction and went from free to $5. That's Zecco, as in ZEro COmmissions, as in their free commissions were so central to their business model at one point that they named themselves after it -- and now they've abandoned it. They claim that customers would rather have more features, like more research options, than low prices. I, for one, was not one of those customers.

• Report this Comment On June 28, 2011, at 8:51 PM, SoundTrading wrote:

  I have used E trade and TD Ameritrade. TD Ameritrade is BY FAR the superior service all around. They treat customers with respect and actually seem to be interested in helping. If I ever had a problem and had to call etrade I always got the feeling I was bothering them. Trade Architect also is an excellent tool. One thing though I think I liked etrade's screener better.

• Report this Comment On June 28, 2011, at 9:01 PM, jdrumstik wrote:

  @peters46,

  Unfortunately, you are a statistical rarity. Most people with money in the market, it is assumed, also have access to their own personal computers.

  Their system probably isn't capable of bypassing the security questions.

  On top of that, they probably figured that a few frustrated customers was more cost effective than dealing with "hacked" accounts.

  Sorry to hear though . . .

• Report this Comment On June 28, 2011, at 9:24 PM, earthmabus wrote:

  I started off a couple of years ago with TD Ameritrade. I love their user interface and the various tools they provide.

  As of last year though, I discovered that many of my coworkers were using OptionsHouse for their trades since the prices were far lower (I think it's $3.95 for a stock trade and $5 for 5 option contracts or $8.50 + .15/contract). Because the price on OptionsHouse was a fraction of what TD Ameritrade was charging, I decided to move the excess cash in my TD Ameritrade account to an OptionsHouse account and use it to initiate any new positions (while continuing to maintain my existing positions with TD Ameritrade).

  I felt that TD Ameritrade's unwillingness to lower their prices was an invite for their me to test drive the competition instead of keeping my business exclusive with them. This is dangerous for TD Ameritrade because, (1) while I prefer my experience with them over the competition, I feel that it's only a matter of time before the competition is on par and (2) I know of others who are also testing out the waters.

  The thing TD Ameritrade should really consider, from the perspective of their customers is... is the couple of millllion in profit you make by not lowering your prices really worth the risk of having your customers flirt with the competition?

• Report this Comment On June 28, 2011, at 11:11 PM, TMFBrich wrote:

  @earthmabus,

  Good post. I think that's the line AMTD is walking, and it's trying to play up its bells and whistles rather than relying solely on low costs.

  <<I felt that TD Ameritrade's unwillingness to lower their prices was an invite for their me to test drive the competition instead of keeping my business exclusive with them.>>

  One thought here: I think brokerage accounts are closer to credit cards than banking accounts. That is, consumers are likely to have accounts with more than one brokerage house, just as they might have a Visa and an Amex.

  Thanks for reading.

  Foolish best,

  Brian Richards

• Report this Comment On June 28, 2011, at 11:37 PM, swat57 wrote:

  I got $8 stock trades and $0.75 per option with TDA by moving an Ira over to them combining that with two existing TDA accounts. You had to get to the right person but it kept my business there. I didn't really want to move anyways. And I love how I can link accounts and have all my accounts under one logon.

• Report this Comment On June 29, 2011, at 8:40 AM, briscully wrote:

  I was using TD but with the $10 per (Buy/Sell), I felt that $20 was a bit much to be taking from Me on Trades. I left the Long Terms in TD and went to Options House. At $4 per (Buy/Sell), $8 from my Profit on a Buy/Sell is acceptable. Their Custome Service is Great. While they have some Tools available, I don't need all the Flashy Tools the others (TD, E-Trade, etc...) Boast about. I have the Fool and the rest of the Internet to research what I need to know.

• Report this Comment On June 29, 2011, at 5:09 PM, rmhunziker wrote:

  I use both TD Ameritrade (TD) and Fidelity. I agree with TD that TD should not try to compete on price alone. However, I think that TD focuses on traders and not investors. TD's love affair with heat grids and flashy momentum widgets supports this notion. Such a focus is not irrational for TD if traders generate more income for TD. However, I am an investor, not a trader, and believe that TD's "products and platforms" are NOT focused on investors. Does anyone know of an online broker that caters to long-term investors who are interested in fundamental analysis? (But yes, lower commissions are still better than higher commissions even if I am not a day trader.)

• Report this Comment On June 30, 2011, at 5:07 PM, drawer77 wrote:

  These brokers make more money from margin rates than commissions. There are brokers out there that have both lower margin rates and commissions.

• Report this Comment On July 01, 2011, at 2:25 PM, Curiousbystander wrote:

  No one's mentioned private Scottrade. Interface is rather Spartan but it gets the job done at 7 a trade.

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