Toronto-Dominion Bank's (NYSE:TD) TD Waterhouse subsidiary and Charles Schwab (NYSE:SCH) decided it was time to kiss and make up. Thank goodness! I was so losing sleep over their dispute. (Actually, I slept like a baby through the whole thing.)

Back in March, Rick Munarriz covered a spat between Schwab and TD Waterhouse that led to Schwab suing its rival. Seems Chucky didn't take too kindly to that guy from Law and Order implying that Schwab belonged to the pernicious league of pricey investment firms. Beset by declining transaction costs, lower trading volumes, and intense competition, Schwab felt that it couldn't allow its brand equity to be sullied by a competitor.

After some presumed maneuvering and wrangling, both firms decided to set their differences aside and get on with business. They issued a joint press release in which TD Waterhouse apologized, stating that Schwab was not like those costly trading houses. Instead of taking things to court, Schwab might have been better served by launching an aggressive advertising attack against the commercials it considered unfair. Sometimes arguing in the court of public opinion (as opposed to plain old court) can work wonders.

Investors in both companies probably didn't even blink when they read about the settlement. It wasn't a huge event, and it shouldn't have affected anyone's decision to either buy or sell the stock. Right now, TD Waterhouse and Schwab -- as well as competitors Ameritrade (NASDAQ:AMTD) and E*Trade (NYSE:ET) -- have more important challenges than squabbles over goofy proclamations from primetime pitchmen. Retail investors are no longer having quite so good a time in the markets. Remember that rally after the recent Iraq war commenced? The easy money was already made; now, investing takes more work. Many retail investors are sitting on the sidelines, which is bad news for the brokers.

Stocks like Ameritrade, E*Trade, and Schwab require a lot of patience and long-term holding; the alternate bull/bear runs will test you. If you believe -- as I do -- that new accounts will go up over time as the ownership society continues to spread its wings (and that this in turn will help to counteract the effect of declining commission prices), then it would probably be wise to have some exposure to this sector. There's no question that retail investors will make increasing use of the markets for personal money management. It's up to the brokers to educate people about the value they can provide.

Your honor, the Fool offers these related takes:

Trade some thoughts at either the Charles Schwab or Toronto-Dominion Bank discussion boards.

Fool contributor Steven Mallas owns none of the companies mentioned. The Fool has a disclosure policy.