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Rating:Schwab Looks to Add Fees for OneSource Not Rated 5.0 Email Routing List Email & Route  Print Print
Monday, May 05, 2003

Schwab Looks to Add Fees for OneSource

by: Ki Kim

Amid tough times in the fund industry, Charles Schwab is looking to tack on fees to the fund firms that sell through its fund supermarket, OneSource, according to a recent Wall Street Journal article.

However, Schwab has not approached the sector's high-volume leaders --Vanguard Group and Fidelity Investments -- on new fee payments, according to the report. Vanguard, which is known for its low-expense approach, tends to not pay for distribution.

Lance Berg, a spokesman for Schwab confirmed that the discount brokerage has been in talks with the firms that sell through OneSource regarding new pricing schedules since late 2002.

Berg declined to elaborate on the new pricing schedules, but did note that the move was made to offset increasing costs associated with shareholder services, including the maintenance of fund relationship specialists, Web and customer support services, and fund screening, research and advice tools.

He declined to comment on the individual fund firms and how they are impacted by the new pricing schedules.

Meanwhile, the WSJ report cites fund officials as saying that the charge for shelf-space in Schwab's no-transaction-fee program is generally being raised to 0.40% of assets a year from 0.35%. Also, funds offered with transaction fees are being asked to fork over a new $20 annual fee for each fund account, according to the report.

The Longleaf, Meridian and Yacktman fund families are among those that have balked at making higher payments to Schwab, according to the article, which goes on to report that Schwab pegs the number of funds that will lose access to its supermarket as less than one percent of the total $144 billion in assets. 

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