Hidden costs of Schwab’s ‘free’ ETF trades

There’s a difference between an inexpensive sandwich and a free lunch. You know exactly what the sandwich costs you, but you have to figure out the real price of “free” when it comes to the lunch. So when Charles Schwab offered investors a free lunch this week in the form of its “ETF OneSource” platform — which allows investors to buy and sell over 100 ETFs with no online trade commissions — investors were so focused on the “free” that they missed the devil hiding in the details. This isn’t to say Schwab ETF OneSource is a bad thing. Far from it: It’s another step forward for the ETF business, especially if it leads to more widespread availability of commission-free trades.

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