I guess Charles Schwab
The leading discount broker is slashing commissions for its smaller and less active accounts. It will now charge a flat $8.95 per online trade for all clients, a price point previously reserved for clients with at least $1 million in household account balances or committing to at least 120 annual trades. Everyone else was paying at least $12.95 for stock and ETF trades.
Simplifying its commission schedule is good news for clients, though rivals E*TRADE
With 7.7 million client brokerage accounts, it's not as if Schwab had any trouble attracting traders under its higher commission schedule. However, this remains a competitive industry. Web-based operators and niche-specific players including Interactive Brokers
Schwab's move may also have been motivated by recent trading activity trends. Daily average revenue trades for November were 27% lower than the previous year's showing. The discounter also announced that it was taking a $108 million hit in fees waived on its money market products. In other words, maybe lower commissions will ignite renewed trading activity or move a little more cash off the sidelines.
It will be interesting to see how the others respond. No broker operates in a vacuum these days.
In the market for a new discount broker? The way that rates and initial deposits are bouncing around, I can't say that I blame you. Check the sponsored broker comparison table in the Discount Broker Center to see if you can find the bargain-minded brokerage outfit that's right for you.