Smith Barney Plans No-Loads --at 1.5% Fee

Smith Barney wants to make money the newfangled way: charging customers a fee to buy no-load funds for them.

The nation’s second-largest brokerage said Tuesday it will add 28 no-load, or commission-free, fund families to the mix of its own load funds and those of other companies that it sells, bringing the total to 2,700.

The company will allow customers who own no-load funds to transfer them to their Smith Barney accounts without charge. “A lot of our clients own no-load funds they bought a while ago and they want to consolidate them. There are also strong-performing no-load funds, and our clients want access to them,” said Sally Cates, a spokeswoman for the brokerage.

But to buy new shares of no-load funds through Smith Barney and take advantage of the company’s research and its asset-allocation programs, customers will have to buy about $50,000 in new shares and will pay a hefty 1.5% annual fee.

Many brokerage houses are moving in the direction of fee-based accounts, so retaining and increasing customer assets means more dollars as the firms continue their slow transition away from commission-based income. Also driving the firms to change is pressure from discount brokers.