Last week, TD Ameritrade Institutional, the brokerage firm we typically recommend to our clients to custody and safeguard their managed assets, announced it was reducing their prices.
Dimensional Fund Advisors (DFA) funds are now $9.99 per transaction, down from TD's standard pricing of $24 per transaction. This is exciting news since we use several Dimensional funds in our clients’ portfolios. Vanguard mutual funds, which we also use, remain at $24 per transaction and allow our clients access to the lower expense ratio Admiral share class with no minimums. By way of comparison, other custodians charge as much as $50 per transaction for mutual funds from Dimensional and Vanguard.
Exchange Traded Funds (ETF)
Standard ETF pricing has been lowered from $9.99 per trade to $6.95 per trade. In the equity portions of our portfolios we often use the ETF version of Vanguard's offerings, so this is welcomed news, as well! Sadly, starting November 20, 2017, the limited number of Vanguard ETFs that have been on TD Ameritrade Institutional’s commission-free list, including several we used regularly will be removed. While this is unfortunate, the new standard pricing of $6.95 per trade is still competitive and a worthwhile cost to access Vanguard ETFs. We will, however, modify our trading guidelines slightly, to ensure this change does not have a material impact on our client's trading costs.
Our Relationship with TD Ameritrade Institutional
The recent pricing changes are overall great news for our clients and reaffirm our confidence in TD Ameritrade Institutional. In addition to competitive pricing, they continue to be at the forefront of technology solutions and client service. As an independent Registered Investment Adviser (RIA), we are completely independent of TD Ameritrade Institutional, but recommend them because of the value they offer our clients.
Posted: March 6, 2017.
Updated: October 16, 2017 to reflect the removal of Vanguard ETFs from TD Ameritrade Institutional's commission-free list, effective November 20, 2017.