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Investing Fees Keep Falling                   

With the launch of its new mobile trading platform, JPMorgan Chase became the most recent entrant in the investing world's battle to offer the lowest fees, notes Ryan Ermey, Kiplinger’s Personal Finance.

The investing service, called You Invest, comes with no investment minimum and gives users 100 commission-free stock and exchange-traded fund trades in the year after opening an account. Investors can earn more free trading if they hold sufficient assets in certain Chase accounts.

Cathy Seifert, an analyst at investment research firm CFRA, expects more firms to slash commissions. Beyond costs, investors should consider the tools and resources a brokerage platform offers. “JPMorgan has a great reputation, but they're a late entrant” in the mobile brokerage business, Seifert says.

The Chase rollout comes shortly after Fidelity slashed its fees and began introducing mutual funds with a zero expense ratio. In August, Fidelity launched Fidelity Zero Total Market Index (FZROX), which tracks the U.S. stock market, and Fidelity Zero International Index (FZILX), which tracks stocks abroad. In the first month, the two funds attracted more than $1 billion in assets. And in September, the company introduced Fidelity ZERO Large Cap Index Fund (FNILX), which tracks large U.S. company stocks, and the Fidelity ZERO Extended Market Index Fund (FZIPX), which tracks small- to mid-sized U.S. company stocks. All the funds have no investment minimums.

What's the catch? The funds are available only to individual investors with Fidelity brokerage accounts. To save on management costs, Fidelity will not license indexes from outside providers but will instead benchmark the funds to indexes assembled by Fidelity. Prospective investors should monitor the funds' performance compared with other low-cost funds that track traditional indexes, says Charles Rotblut, vice president of the American Association of Individual Investors.

Meanwhile, online brokerage Firstrade recently announced that it will offer free trading on all stocks, ETFs and options.

The goal of Fidelity and Firstrade is to attract new customers, says Michael Venuto, chief information officer for investment firm Toroso Asset Management. “It's no different than a toaster at a bank or free breadsticks at Olive Garden,” he says. Once you're a customer, firms will likely try to sell you more expensive products, he says.

Editor’s Note: Ryan Ermey is a staff writer at Kiplinger's Personal Finance magazine, www.Kiplinger.com.


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