Advisors turning toward zero-commission trading, other changes

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As commissions hit zero for exchange-traded funds, advisors are using ETFs more for investors and making other changes in their practices. So says the latest report from Cerulli, The Cerulli Edge—U.S. Advisor Edition, which also says that as several of the largest RIA custodians adopted zero-fee trading, it’s “quickly become the norm—impacting both direct investors and financial advisors who are increasingly using the vehicle as a building block for client portfolios.”

While advisors mostly stayed away from ETFs in 2019 because of client concerns over cost, the move to zero-commission trades late in the year has cleared the way for “substantial room for growth in the ETF space among financial advisors,” according to analyst Matthew Belnap. He is cited saying in the report that “the race to zero will likely serve as the catalyst for increased adoption.”