Will I incur commissions when using BrokerageLink?

A client writes in:

"I did some research on the brokerage link acct and it looks like there are transaction fees for the ETFs of $7.95/trade and anywhere from $0 up to $75 for mutual fund on top of what the mutual fund charges. I don't currently pay any transaction fees in my 401k. How frequently would I expect FutureAdvisor to be trading in the BrokerageLink acct? I don't want to lose money to frequent trades from constant rebalancing. Thanks!"

FutureAdvisor reply:
You're correct in that you don't currently pay transaction fees in your 401(k) to buy the mutual funds you are in. But, are you familiar with "expense ratios?" (Client held some moderately expensive mutual funds in his 401k). Your RERGX position has an exp ratio of 0.49% and DODGX has is 0.52%. We'd get you over to low-cost ETFs that have an avg exp ratio of 0.15 to 0.18%.

Our algorithm takes into account ALL factors, including the $7.95 trade commission, on the rare instances it is charged. Almost all of the ETFs we choose at Fidelity trade commission free (mostly iShares). Sometimes there is a better ETF for you to purchase because it has a cheaper expense ratio, so paying the $7.95 commission would be worth it. The algorithm is always weighing all these factors when monitoring your account, then all trade recommendations are reviewed by a human :) So, in short, your account would not be traded with commissions "frequently." You would probably see a couple $7.95 commissions in our initial rebalance and then one or two every few months. We avoid buying mutual funds in your account unless your plan forces us to, so you should not see any $30 commissions. You would want to sell your existing funds into cash as part of the move over to BrokerageLink.

We typically rebalance clients' accounts 4-6 times per year, but it really depends on market conditions. We rebalance whenever your account needs it because it has drifted away from it's target allocation. I've been a Premium client myself for 6 months and have been rebalanced twice, if that helps. I usually trade commission free, but sometimes I see a $7.95 commission, and when I do, it doesn't bother me because I know it was in my financial best interest to pay that to get a lower expense ratio. Or maybe there wasn't an ETF available for that asset class that trades commission free.

Hope that helps clear things up!