Fidelity Investments plans to launch a "no transaction fee" account this fall for buyers of no-load mutual funds, following the lead of Charles Schwab & Co.
Under the program, Fidelity would sell an array of funds -- its own as well as those of other companies -- and would handle shareholder servicing on the accounts. Customers would pay no fees and would receive consolidated monthly statements from Fidelity.
With the marketing arrangement, Fidelity would be extending its push into the discount brokerage business.
"I can admit to you that it's in the works," said spokeswoman Paula Slotkin. "But I can't give you any details until this fall."
One fund manager who said he will sign up for Fidelity's program said the Boston-based gigant will "go into a big way."
Fund Companies Pay
Launched less than a year ago, Schwab's no-fee account has attracted $4 billion in assets. In exchange for handling account administration, Schwab collects fees from the eight mutual fund companies whose products are available through the account.
Similar programs have been established or are in the works at Quick & Reilly Inc., New York, and at Waterhouse Securities Inc. and Jack White & Co., San Diego.
Tom Taggart, spokesman for Schwab in San Francisco, said his company was aware of Fidelity's plans and welcomed the competition.
Discount brokerages take in 11% of the industry's commission revenue, Mr. Taggart said. Of that share, Schwab has 45%, Fidelity 25%, and Quick & Reilly 20%. The rest is split among a number of firms.