Schwab unveils no-fee platform for exchange-traded funds

NEW YORK Feb 7 (Reuters) - Charles Schwab Corp is applying its successful formula for selling mutual funds to the masses by waiving transaction fees on exchange-traded funds.

The on-line brokerage giant, which ended 2012 with $223.2 billion of client money in its OneSource no-fee fund platform, said Thursday that after months of negotiating with ETF providers, it is launching a similar platform for the increasingly popular ETF products.

Schwab makes money on the platforms by charging fund providers a percentage of the assets that clients purchase through Schwab. The San Francisco-based brokerage charges most mutual fund providers a hefty .40 percent of the money they collect from its clients.

Schwab has had a harder time convincing ETF providers to pay for shelf space for their products because one of the advantages of ETFs is that their costs are lower than on mutual funds. As previously reported, Schwab has been trying for months to recruit ETF providers for its new platform.