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TD Ameritrade Jumps Into Price War With Fidelity and Schwab

Investors want their services cheap or free these days, whether it’s an adviser, a mutual fund, or a trade.

Another day, another clash of the brokers' broadswords.

One day after Fidelity Investments announced a fee cut for individual investors, and 12 hours after Charles Schwab Corp. followed suit, TD Ameritrade Holding Corp. waded into the fray. Late Tuesday night, the company said it had lowered commissions on standard online retail trading to $6.95, from $9.99, a trade. The lower rate also applies to options trades, though the company maintained its 0.75 cent fee on individual contracts.

The rates don't match those of its rivals. Fidelity and Schwab lowered retail commissions on online trades to $4.95, from $7.95 and $6.95, respectively, and moved from a fee of 0.75 cents per individual options contract to 0.65 cents. Fidelity is the nation's largest online retail brokerage, with 17.9 million accounts and $1.7 trillion in client assets as of Dec. 31, 2016.

"There is an effort underway in our industry to redefine value," Tim Hockey, TD Ameritrade's chief executive officer, said in a statement about the lower commissions. "While some are leading with price, our clients tell us it's much more than that."

After detailing the customer experience the firm offers clients, however, Hockey said that "with our pending acquisition of Scottrade on the horizon, we have a unique opportunity to enhance that experience in the future with lower pricing for all of our...