Brokerage: another round in the price war

Brokerage: another round in the price war

Vanguard raised its game last Thursday by announcing that Vanguard Brokerage clients would no longer pay commissions to trade shares or options.

Clients of Vanguard’s online brokerage platform were already enjoying this advantage on several mutual funds (mutual funds) and exchange traded funds (ETFs).

In fact, Vanguard mutual funds have been free to trade since 1977, Vanguard ETFs since 2010 and virtually all ETFs in the industry since 2018. More than 3,000 mutual funds issued by players other than Vanguard can also be traded for free on the platform of this American giant.

For 45 years, we have been committed to reducing the costs of indexed and active funds, ETFs, advisory and brokerage services to help investors achieve better results, » said Karin Risi, Managing Director of Vanguard’s Retail Investor Group, in a statement. The expansion of our commission-free platform is the latest demonstration of this unwavering commitment to our clients. »

However, Karin Rici urges investors to exercise due diligence. The disappearance of apparent fees can sometimes hide the existence or even increase of fees included in products, which is more difficult to spot. As we move into an environment where zeroes make headlines and explicit fees become implicit, we encourage investors to take a closer look at the total fee picture, » she said. Vanguard remains a strong advocate of clear and transparent disclosure of fees. »

Some brokerage platforms place their clients’ uninvested cash in accounts offering low interest rates, as the New York Times reported last November. They then invest the money themselves in products that offer them a better return, and pocket the difference.

The free transactions are also sometimes used as a hook to attract clients to other services, such as financial or tax planning, which are of great benefit to these large firms.

Throughout 2019, the rate war raged on brokerage platforms in the United States. In September, Interactive Brokers was the first to waive transaction fees on equities and ETFs traded on its Interactive Brokers Lite service. The giant Charles Schwab then shook the columns of the temple by abolishing fees on all equity trades on its platform, prompting rivals TD Ameritrade, E*Trade, Ally Invest and Fidelity to follow suit a few days later.

In November, Charles Schwab dealt another big blow by acquiring TD Ameritrade for US$26 billion (approximately C$33.7 billion). Will the war continue into 2020? Will it cross the Canadian border? More…

Which measure corresponds to a reduction in protectionism?

Which measure corresponds to a reduction in protectionism?

Protectionist measures essentially consist of slowing down imports (customs barriers, restrictive standards, administrative obstacles), encouraging exports (various subsidies, tax incentives, devaluation, dumping such as « offensive protectionism »), favouring companies, etc.

What can be the benefits of ec1 protectionism?

In the long term, protectionism also makes it possible to limit or even reduce the trade deficit, it allows the economic development of the State (increase in public revenue thanks to customs duties) which in practice therefore increases the growth of the country in question (by means of the …

Why might a country have an interest in pursuing a protectionist policy?

Why might a country have an interest in pursuing a protectionist policy?

Topic: With the help of your knowledge and the documentary record, you will explain why it may be in a country’s interest today to pursue a protectionist policy. … In this case, the purpose of protectionism is to reduce imports in order to rebalance the balance of trade.

What is Free Trade and Protectionism?

Free trade is an economic policy that advocates the removal of customs restrictions (both tariff and non-tariff) to make way for the free movement of goods and services between countries without government intervention … Free trade is therefore de facto opposed to protectionism.

What is the effect of protectionism on prices?

What is the effect of protectionism on prices?

The effects of a customs duty If the State levies a customs duty on an imported good, the domestic producers of the substitute good align themselves with this new domestic price, thus increasing their profit. Consumers buy the imported good and the substitute good at the same price, a price that incorporates the tariff.

What are the tools of protectionism?

Protectionist instruments fall into two broad categories: tariffs and new protectionist (or non-tariff) instruments.

How do you measure protectionism?

World Trade Organization (WTO) data allow us to measure the level of protectionism of countries through the tariffs they apply to imports from other countries.

What’s protectionism?

A system of protecting a country’s economy against foreign competition by means of tariff (customs duties) and non-tariff (quotas, quotas, standards, export subsidies) measures.

What are the effects of protectionism?

What are the effects of protectionism?

Increased tax revenues; Redistribution of consumer income to the benefit of producers and the State; The possibility of avoiding excessive economic specialization, which leads to macroeconomic risks.

Which countries are the most protectionist?

According to WTO data, Argentina, Brazil, India are among the most protectionist countries in the world with tariff rates above 13% .

What are the disadvantages of protectionism?

Reprisals by other countries, which may lead to trade-damaging retaliatory measures. Rising costs of living in general. Risk of damaging the trading system.

Brokerage: another round in the price war
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