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Fidelity is the last to cut online trading commissions to zero



Fidelity Investments eliminated trading commissions on its web brokerage, and matched one step with some of the biggest rivals unveiled last week.

From early Thursday, Fidelity stopped charging individual investors' commissions for online trades with US stocks, exchange traded funds and options trades. For investment advisers, commissions will be reduced to November 4. Fidelity's online brokerage has 21.8 million accounts.

Prior to Thursday's move, Fidelity charged $ 4.95 for online stock trading.

Wall Street's digitization has restored many of the basic costs of investing, from commissions to fees paid on mutual funds, and raised investors' expectations of their brokers, advisors and money managers. Companies like Fidelity and

Charles Schwab Corp

, the first web broker to eliminate commissions, has competed to attract more customers to affordable products and services. Some of these price wars have ended with fees at or near zero.

Schwab said last week that it would scrap commissions for trading stocks, ETFs and options online. While

TD Ameritrade Holding Corp

and

E * Trade Financial Corp

followed quickly, Fidelity didn't. And even after the company matched the offer, Fidelity executives have been trying to downplay the importance.

"We prioritized where we could give the most value to investors,"

Kathleen Murphy,

president of Fidelity's personal investing business, said in an interview. "It is much more important to have industry-leading cash and trade practices."

Fidelity has long argued that the firm acts more efficiently than many of its peers, saving money for clients.

Two months ago, Fidelity unveiled plans to distribute customers 'money into high-yield money market funds, arguing that the step provided a sharp contrast to competitors' practice of paying out ultra-low cash rates.

More than 500 ETFs have already traded without commission on Fidelity's platform, including hundreds managed by

BlackRock Inc.

"We continue to have a great relationship with BlackRock as well as the other ETF sponsors currently participating in our commission-free ETF platform," said a spokesman for Fidelity.

Write to Justin Baer at justin.baer@wsj.com

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