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.
Longtime Fool contributor Rick Munarriz believes in self-service gasoline pumps and self-service stock brokerages. He does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.