Broker Options: Wells Fargo

June 17, 2011

We recently asked NoLoad FundX subscribers what broker they were using. Although the majority of subscribers were using Schwab and Fidelity, some subscribers said they were using Wells Fargo to trade mutual funds and ETFs.

“With Well Fargo, $25,000 or more gets you 100 free trades per year and ALL mutual funds have NO FEE,” one subscriber wrote. “This works great with FundX.”

Another subscriber said, “I have money at Fidelity TD Ameritrade and Wells Fargo. No redemption fees at Wells Fargo and excellent selection of funds.” Given these comments, we decided to take a closer look at WellsTrade, Wells Fargo’s brokerage service.

Fund Selection

Fund selection seems decent at WellsFargo. Wells says they have 1,200 mutual funds available without transaction fees.   Wells doesn’t have a way to check ETFs, but they do post their mutual fund selection online.

Of the 12 noload funds in the June 2011 MUP, all but two funds were available at WellsTrade.  All of the 12 noload funds in the June Monthly Flexible Income Portfolio (MFIP) were also available at Wells (The WellsTrade website did not allow us to determine if the funds were transaction fee funds or no transaction fee ( NTF) funds).

Trading Costs

Fees are also competitive at WellsTrade. As many our subscribers noted, WellsTrade confirmed that the broker does not impose a redemption fee on mutual fund shares held less than 90 or 180 days.  In fact, Wells has no minimum holding time for mutual funds.

Wells charges $35 to buy a transaction fee mutual fund which is less than Fidelity, Schwab, E*Trade or TD Ameritrade. But Wells’ $19.95 ETFs trading fee is relatively high. All eight of the brokers we recently surveyed charge $10.00 or less to trade ETFs. There is an additional charge of r$25 for broker-assisted fund or ETF trades.

Fees are far more favorable if you qualify for a checking/brokerage combination called a PMA Package.  PMA accounts get 100 free trades a year – and these free trades can be applied to mutual fund trades as well as stock and ETF trades.

Wells Fargo Account Types Mutual Fund
transaction fee
ETFs
Standard $35 $19.95
PMA First 100 trades a year are free. $8.95 thereafter. First 100 trades a year are free. $8.95 thereafter.


Wells’ website explains that in order to become a PMA member, however, you must link your WellsTrade brokerage account to a “Wells Fargo PMA Package” and a PMA Package includes a PMA checking account with Wells Fargo Bank or a brokerage account with Wells Fargo Advisors.

There is a $30 monthly service fee for PMA packages, but the WellsTrade website notes that there is “no monthly service fee for each month the statement-ending balances in qualifying accounts total $25,000 or more.”

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