At a glance
- Providers and platforms still negotiate commercial arrangements.
- Some also offer targeted content deals.”
- For advisors comparing platforms, the question is whether a fund's shelf placement is tied to a commercial arrangement, not whether the trade ticket says zero.
Zero-commission ETF trading has not eliminated the economics of getting funds onto platforms, HANetf co-CEO Hector McNeil told ETF Express. Providers and platforms still negotiate commercial arrangements.
“There is no single model and commercial arrangements vary considerably depending on the platform and the market in which it operates,” McNeil said. “This can range from subsidised trading or arrangements around sharing part of the TER. Some also offer targeted content deals.”
For advisors comparing platforms, the question is whether a fund's shelf placement is tied to a commercial arrangement, not whether the trade ticket says zero. The TER does not answer that question.
Julius Weller, VP broker at Scalable Capital, said any payments made by ETF providers come from the provider's own resources and are not deducted from client assets. He cited Scalable's diversified revenue, including interest, lending, subscriptions and its own ETFs.
Savings plan orders are aggregated to reduce clearing, settlement and execution costs to marginal levels, Weller said, making zero-commission execution commercially feasible at scale.
Martins Sulte, CEO and co-founder of Mintos, said his platform receives no remuneration from ETF issuers, including distribution or marketing fees, TER sharing or rebates. Its zero-commission ETF trading is not subsidized by issuers. “We may not earn on ETFs specifically, but the platform as a whole generates the economics that make it possible to offer them at no cost to the investor,” he said. Mintos's ETF catalogue comes through a partnership with Upvest.
The ETF Express column, published Nov. 3, argues that as more ETF buying happens on digital platforms and through savings plans, placement becomes more important for smaller issuers already fighting the industry's biggest brands for assets and liquidity.
McNeil has made a related point about fees before: the wrapper alone does not tell you whether a strategy should cost 3 or 80 basis points, as Private Wealth Daily previously reported. The platform arrangement sits alongside that fee and is not part of it.
Reported by the Issuers desk from ETF Express. Published . Corrections