NEW YORK Feb 7 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.