Fidelity National Information Services, Inc. (NYSE: FIS) announced Tuesday that the firm has decided to lower the costs of trading U.S stocks and exchange-traded funds on its platform from $7.95 to $4.95. This made fidelity the cheapest trading and investment platform among its major competitors. This lasted only for a very short period of time however. Just hours later Charles Schwab (NYSE: SCHW) announced that it lowers their trading commissions as well, from $6.95 to $4.95.
“For most investors today, trading technology, customer service and access to other financial products tend to trump commissions per trade when it comes to deciding where to open their account,” Raymond James analysts wrote in a recent research report, the NYTimes reported.
Trading and investment platforms have been under pressure to cut their fees, which often are a burden on investors and returns. The more traditional and sophisticated platforms, like TD Ameritrade (NYSE: TD) and E*Trade (NASDAQ: ETFC) charge their customers $9.99 per one trade. These platforms are facing new competition from new platforms like Robinhood, which offers no fee trading services.
“With these unprecedented price cuts Fidelity is continuing to transform the brokerage industry, bringing the best value to retail clients,” said Ram Subramaniam, president of Fidelity’s retail brokerage business. “Our active trader clients who make hundreds of trades each year will particularly benefit from our dramatic price reductions, and all clients who trade will be able to keep more money in their pockets.”