Source: Wells Fargo
Wells Fargo & Company (NYSE:WFC) today announced new low and no-cost online stock and mutual fund commissions for WellsTrade, its brokerage account for self-directed investors, offered through Wells Fargo Investments, LLC.
Unlike brokerage accounts at other firms, the new WellsTrade commissions benefit customers who have broad brokerage and banking relationships with Wells Fargo. Commission levels are determined by combinations of bank checking and savings deposits, investments, IRAs, loans, credit balances and 10 percent of mortgage balances. The offering cuts commissions for online mutual fund investing, largely neglected by other brokers in their recent commission reductions.
"Many brokerage firms are focusing primarily on commission reductions for high-asset clients and frequent traders of individual stocks," said Rachel Perkel, senior vice president at Wells Fargo Investments. "The industry, for the most part, has shied away from providing great value to the long-term investor, particularly those interested in mutual funds. Wells Fargo Investments now offers customers the opportunity to qualify for some of the lowest commissions in the industry - regardless of brokerage assets and number of trades."
Other brokerage firms have commission tier breakpoints based solely on brokerage balances, usually starting between $500,000 to $1,000,000. In contrast, Wells Fargo Investments has made it easier to qualify for discounted commissions by setting lower qualification thresholds, which are based on a customer's combined brokerage and banking relationship balance.
Leading the Industry By Reducing Online Mutual Fund Transaction Fees
Over the past 12 months, the brokerage industry has experienced dramatic price pressure and most major firms have focused on reducing stock commissions and fees. To date, the industry for the most part has not reduced transaction fees for online no-load mutual funds. Unlike most other brokers, Wells Fargo Investments is lowering the WellsTrade transaction fees for online mutual fund trades for customers with the Wells Fargo Portfolio Management Account (PMA).
The relationship-based PMA account is essentially a combined checking account that provides reduced fees and special services to clients with total balances of $25,000 or more at Wells Fargo. The PMA account offers, among other things, a competitive money market interest rate, no monthly fees on linked checking and savings accounts, Wells Fargo's Platinum Check Card and Wells Fargo Credit Card with no annual fee, free checks, free online banking and bill pay, overdraft protection and a combined statement that links all accounts.
Many people may be surprised to learn that they may already have large enough relationship balances to qualify for a Wells Fargo PMA and reduced online trading commissions - especially considering that 10 percent of their mortgage liability, among others, is taken into account.
Transaction fees for online no-load mutual fund trades for those with PMAs will now be as follows: $9.95 for those with PMA accounts, $2.95 for those with PMA balances from $100,000 to $249,999(a), and commission-free for those with PMA balances of over $250,000(a).
The WellsTrade account provides access to over 2,000 no-load mutual funds from many well-known fund families, including more than 800 no-load funds that are available to all customers without transaction fees. PMA customers will now enjoy reduced, or no transaction fees on all no-load funds.
Low and No-Cost Online Stock Trading Commissions
Consistent with reductions in online mutual fund transaction fees, customers with PMAs will now be offered a commission rate of $9.95 for online stock trades. PMA customers with $100,000 in relationship balances at Wells Fargo will now pay only $2.95 per trade(a), and those with $250,000 or more in relationship balances at Wells Fargo qualify for up to 50 commission-free trades(a). Unlike other brokerage firms, which typically offer free stock trades for only the first 30-60 days after account opening, Wells Fargo Investments is offering 50 commission-free trades per year.
Wells Fargo, which introduced Internet banking in 1995, is committed to delivering on its strategy as an innovative financial services provider that is leveraging technology for customer convenience. Wells Fargo offers customers anytime, anywhere banking so they can get the information they need - when, where, and how they want it. As a testament to this, customers can sign up for a WellsTrade account online at wellsfargo.com, by phone, or with a registered securities professional in a bank store.
The WellsTrade brokerage account is offered by Wells Fargo Investments, which is part of Wells Fargo's Private Client Services group (PCS). PCS provides customers an entire range of financial products and services, including full-service brokerage through Wells Fargo Investments, investment management, trust and estate services, insurance and private banking. In terms of assets under management, PCS has more than $78 billion for brokerage and more than $166 billion overall as of the end of April 2005.
"Our high-touch, high-tech philosophy is also reflected in the WellsTrade commissions for agent-assisted phone trades, which are among the lowest priced in the industry," said Greg Bronstein, executive vice president at Wells Fargo Investments. Wells Fargo Investments charges $25 - plus the online commission rate, compared to some others in the industry charging $40 and higher.
"Whether customers invest with the help of a Wells Fargo Investments financial consultant or manage their investment decisions independently with a WellsTrade account, they can benefit from our relationship-based approach to service and pricing," added Bronstein. "We've found that even many self-directed brokerage clients divide their money between self-directed and full-service; in doing so these customers also have access to our 1,200 financial consultants that service our clients' full service brokerage and investment needs."