Charles Schwab to cut fees by about $4 per trade

on January 07 2010 12:24 PM

Charles Schwab Corp , the largest U.S. online brokerage, said on Thursday most clients will soon pay about $4 less per equity trade, a rare pricing change it said was meant to make trading more affordable.

Beginning January 19, all clients will pay $8.95 per online stock or non-Schwab exchange-traded fund (ETF) trade, down from $12.95 at present for most clients.

The change essentially gives less-active clients with smaller balances the low fees now reserved for active, high-balance clients.

There are extra fees for phone and broker-assisted trades.

The surprise move comes about two months after the brokerage unveiled a line of index-tracking ETFs and could put pressure on rivals to follow suit to retain clients, known as retail traders. Online brokers suffered an overall trading drop last quarter following 2008's volatile market selloff.

After the past two years, our clients are thinking more than ever about their financial future..., Schwab Chief Executive Walter Bettinger said in a statement.

The San Francisco-based company also said new managed ETF portfolios would be available January 19.

(Reporting by Jonathan Spicer; editing by John Wallace)

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