9 ms·

If you don't pay for the service, you end up the product.

craftyguy 8y ago
While usually true, it's not 100% true in all cases. In this case, it's almost certainly a loss leader for other higher priced funds and other financial advising/services they offer.
- ppeetteerr 8y ago
  I don't buy it. This is a financial company. They don't compete with their own funds for the opportunity to up-sell their customers.
  - craftyguy 8y ago
    And why not? Being a 'financial company' is not really a convincing argument against them possibly up-selling here.
    - ppeetteerr 8y ago
      I'm not referring to the up-sell. They can upsell a cheaper service. Having a free service means that every customer is extra cost. When you sell something, however little you charge, you still charge just above recurring cost (unless you're a startup). If you don't charge, then every customer is an expense. Trusting that your sales team can up-sell hard enough to compensate for the recurring cost of a customer is wishful thinking.
      - craftyguy 8y ago
        You're assuming that all fidelity customers are competent investors, when in fact many (most?) of them are customers of fidelity only because fidelity is the custodian for their company retirement plans. Many (most?) of these folks had no idea why a ER > 1.0% was not good for them, but now that the word is out, this could easily be a gimmick to convince more folks to choose fidelity for servicing retirement plans and investments. So, 1) pick trendy topic among casual (retirement) investors, 2) blow competition out of water by offering it for free to get their attention, 3) gain trust and additional business from casual investors My employer uses fidelity for retirement plans (so I'm a customer, whether I like it or not), and I'm bombarded by emails/communications very regularly to sign up for various services from fidelity for 'planning for my future'. These services ultimately cost a lot of money. Many of my coworkers have signed up.
      - gowld 8y ago
        Running ads pays 0, well below recurring cost. It's an expense. Free tier is an expense. Many products have a free teir, such as AWS, Google Drive, and Trader Joe's samples.
seattle_spring 8y ago
This line would make a great square for "Hacker News bingo."

While usually true, it's not 100% true in all cases. In this case, it's almost certainly a loss leader for other higher priced funds and other financial advising/services they offer.

ppeetteerr 8y ago
I don't buy it. This is a financial company. They don't compete with their own funds for the opportunity to up-sell their customers.
- craftyguy 8y ago
  And why not? Being a 'financial company' is not really a convincing argument against them possibly up-selling here.
  - ppeetteerr 8y ago
    I'm not referring to the up-sell. They can upsell a cheaper service. Having a free service means that every customer is extra cost. When you sell something, however little you charge, you still charge just above recurring cost (unless you're a startup). If you don't charge, then every customer is an expense. Trusting that your sales team can up-sell hard enough to compensate for the recurring cost of a customer is wishful thinking.
    - craftyguy 8y ago
      You're assuming that all fidelity customers are competent investors, when in fact many (most?) of them are customers of fidelity only because fidelity is the custodian for their company retirement plans. Many (most?) of these folks had no idea why a ER > 1.0% was not good for them, but now that the word is out, this could easily be a gimmick to convince more folks to choose fidelity for servicing retirement plans and investments. So, 1) pick trendy topic among casual (retirement) investors, 2) blow competition out of water by offering it for free to get their attention, 3) gain trust and additional business from casual investors My employer uses fidelity for retirement plans (so I'm a customer, whether I like it or not), and I'm bombarded by emails/communications very regularly to sign up for various services from fidelity for 'planning for my future'. These services ultimately cost a lot of money. Many of my coworkers have signed up.
    - gowld 8y ago
      Running ads pays 0, well below recurring cost. It's an expense. Free tier is an expense. Many products have a free teir, such as AWS, Google Drive, and Trader Joe's samples.

seattle_spring 8y ago

This line would make a great square for "Hacker News bingo."