Sunday Musings: Missing The Point

A few days ago, I posted about Schwab’s venture into “Commission Free ETFs.”

While I think that this move is a great step in the right direction, most readers who commented missed my point entirely by being more concerned about venting petty grievances.

In case you don’t remember, back in 1992, Schwab was the innovator when they created the mutual fund market place, which allowed you to have one brokerage account and invest in thousands of mutual funds, many on a no transaction fee basis. It was an unheard concept, which caught on quickly and has since become the standard for any brokerage firm.

While Schwab for a number of years, due to internal policy and management changes, lost that leadership, I believe that they now have stepped up to the plate again by being the first to offer commission-free ETFs with very low annual fees.

To be clear, this is not meant to be a plug for Schwab on my part. I believe that if they can succeed with their efforts of offering a wide variety of commission-free ETFs over the next couple of years, they will have an impact on all competitors. It may lead to others having to follow in the same footsteps, which eventually may result in no commissions (or extremely low ones) at all brokerage houses.

Looking at the big picture, every investor will be served well by this potential outcome no matter where you prefer housing your assets.

About Ulli Niemann

Ulli Niemann is the publisher of "The ETF Bully" and is a Registered Investment Advisor. Learn more
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