Cambria's Meb Faber Blasts Fidelity Over ETF Fee Plans
What You Need to Know
Fidelity plans to charge investors up to $100 to buy ETFs from firms that don’t agree to pay a support fee of up to $15% of their ETF revenue.
The Cambria Investment Management CEO likened the move to extortion and said it would be a major PR mistake.
Faber described the fee plan as anti-competitive and predicted Fidelity would face regulatory scrutiny.
Meb Faber, Cambria Investment Management CEO and chief investment officer, has taken Fidelity Investments to task for its plan to charge investors up to $100 to buy ETFs from firms that don’t sign maintenance agreements with the investment behemoth.
In a post on X, formerly Twitter, on Wednesday, podcaster Faber provided his feedback “to Abby and the crew,” presumably a reference to Fidelity CEO Abigail Johnson, panning the company for what he called an anti-competitive move that’s likely to draw regulatory scrutiny.
Fidelity previously confirmed a Bloomberg report last month that it plans to impose the fee on ETF purchases from nine issuers that don’t have maintenance agreements with the asset manager — and that the list could be updated before it implements the fees in June.
“We know retail and advisor clients who have moved on since the announcement, and we will also move on,” Faber posted. In an email response to ThinkAdvisor on Thursday, he explained, “We have Cambria brokerage accounts at Fidelity we will move elsewhere.”
If Massachusetts-based Fidelity were located in any other state, Faber posted on X, U.S. Sen. Elizabeth Warren, a Bay State Democrat known for taking a pro-consumer stance against financial institutions, “would be losing her mind about this.”
Fidelity, he wrote, will start charging issuers up to 15% of all ETF revenue. “Otherwise, retail investors pay $100 per trade charges,” he added, listing what he called the problems with the plan.
First, he suggested in his post that it raises antitrust issues. “Fidelity and Schwab have about 85% of the RIA marketplace. Fidelity also has its own funds on their marketplace. This will draw regulatory scrutiny as Fidelity provides no value for the fee; it is just rent-seeking.
“To those that will say but mUtUaL FuNdS!! Do you want to return to that high-fee conflict of interest world?“
