Wells Fargo Free Stock Trades

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May 17, 2009 8:05 pm

Wells Fargo offering 100 free stock trades.  Does that undermine the FA at WF Advisors?

 
https://www.wellsfargo.com/investing/styles/wt/
May 17, 2009 9:33 pm

Is that the kind of business you do? I didnt think there was anyone left in this industry that did transactional biz

That doesnt bother me in the least. We dont get any rev from online trades at WS, er WFA, as it is. 

May 17, 2009 9:46 pm

Yum Kool Aid!

May 18, 2009 1:54 pm

How is that 'drinking the kool-Aid'?

 
I dont do transactional stock trades for clients on a daily basis. They could go online now for $20 and do it so why is'free' going to make any diff?
May 18, 2009 7:36 pm

There is money to be made in trading stocks, contrary to Etrade's shankapotumus marketing campaign and the whole charge a fee and let someone else pick investments mentaility. I think the point was that your firm is cutting into your potential income, not that other firms aren't doing the same.

May 18, 2009 7:38 pm
Gordon Gekko:

There is money to be made in trading stocks, contrary to Etrade's shankapotumus marketing campaign and the whole charge a fee and let someone else pick investments mentaility. I think the point was that your firm is cutting into your potential income, not that other firms aren't doing the same.



Yup

May 19, 2009 10:03 am

True, but my point is that the whole online trading deal that started in the 90's was supposed to the same thing, cut into our potential income- but I dont think it has in the least. Most 'full service' clients already know they have less costly online options but continue to seek advice. I just dont see 'free trades' as competition.







 
The spreads will most likely be wider anyhow
May 19, 2009 10:27 am

Chazzy,

 
If there was NO online trading, an investor that wanted to buy XYZ stock would have to go to a broker, open an account, place a trade, and pay for that trade.  With the birth of and evolution of on-line trading in the grand scheme of things, YES it has cut into our income potential.   
 
I know what you are saying.  I'm just saying!
May 19, 2009 7:38 pm

I think the online mass marketing of investing has cut both ways.  It has created price competition for us and we all have lost business because of it.  On the other hand, it has "created" a huge number of investors so we have more business to get.  I was a broker before Al Gore invented the internet so I have seen both sides.  I'll take the smaller piece of the much larger pie we have today.

May 19, 2009 7:39 pm

I forgot to add that I would be p!ssed @ff if my own firm was the competition.

May 21, 2009 5:33 pm

No biggy, the setups I trade are insulated. If Joe Shmoe, who's more worried about paying a fee than net, he's not a client I would want. Most of my business is transactional. How many trust, endowment or foundation accounts are going to give a crap about a few on-line free trades.

 
The way I explain it is telling the client that if I just found a $100 bill and gave you $90 of it are you going to be angry? how about $80, $70, $60 ??????
 
Because that's exactly what I'm doing.
 
Would you ever consider paying a fund 6% annually?  they say no way, up until the crash, I would show them the performance of IAS a private placement managed futures. They were making crazy returns. Suddenly the 6% didn't matter.
 
I can also say I sure don't feel the love from San Fran. or St Louis.
 
May 29, 2009 3:04 am

Just to pile on, Mercedes doesn't complain that Toyota sells more cars. Ruth Chris never complains about Sizzler and A G Edwards never worried about Wall street.

May 29, 2009 6:40 am

Wells Fargo offering free-online-trades is no differenct in my opinion than firms like Schwab, TD Ameritrade, Fidelity, etc., who work with RIA firms but also have a separate retail division too.  I think its a conflict of interest myself but this conflicting business practice has been around so long I think most Advisors expect something like this these days but don't have to like it. 

 
I've often wondered, which master do they serve first, the retail consumer or the investment advisor?