Since people keep trading in the financial markets regardless of whether stocks go up or down, you might expect brokerage firms to have some resistance to a recession. But many brokers have seen their earnings take big hits lately -- and they're doing everything they can to try to woo customers and boost their businesses.

Within the brokerage industry, earnings have generally been on the decline. For instance, here are the latest results from some discount and premium brokerage firms:


Most Recent EPS

% Change From Year Ago







E*Trade Financial (NASDAQ:ETFC)



Morgan Stanley (NYSE:MS)



Interactive Brokers (NASDAQ:IBKR)



thinkorswim (NASDAQ:SWIM)



TradeStation (NASDAQ:TRAD)



Source: AOL Finance. N/M = not meaningful; E*Trade had a loss of $0.20 per share in the year-ago period.

These numbers give you a good sense of just how fierce the competition is in the brokerage industry right now. And while many discount brokers avoided foraying into other businesses like mortgage financing that gave Wall Street firms their toxic asset problems, the slowdown has nevertheless had a significant impact on their core businesses.

But the cutthroat environment is actually good news for investors, in that brokers are now trying to expand their product offerings and compete for your business, encouraging customers to turn to brokers as a one-stop shop for all their money needs. With brokers focusing on getting your business, you'll find them developing and expanding on tools that could help you invest more easily.

Everything you'd want to trade
The days when you needed one broker for stocks, another for bonds, and another for specialty investments like futures and options are over. Nor do you need to go directly to mutual fund companies to invest in funds. Nowadays, plenty of brokers let you trade many different types of securities, all from one account.

The ability to buy different kinds of investments, however, doesn't do most investors much good if they don't have the expertise and information necessary to profit from them. But brokerage firms are responding with an ever-improving toolbox of ways for their customers to find and research promising ideas.

For instance, brokerage firms have vastly improved their bond trading tools, now giving investors access to thousands of different bond issues, including Treasuries, corporate bonds, and municipal bonds. I personally have the most experience with E*Trade's bond platform, which offers features like seeing price histories of particular bonds with a single click. But other brokers have also beefed up their bond tools, collectively making it much easier for individual investors to buy and sell individual bonds.

Similarly, more brokers are now offering analytical tools to help you evaluate options. Given how complicated option pricing can be, even the most simplistic tools can get complicated in a hurry -- but they not only give you useful data but also provide some helpful explanations on what they mean and how to use them to your best advantage.

Get what you want
The difficult position that brokerage firms are in right now gives customers more leverage in demanding exactly the types of services they want for their particular investing styles. In all likelihood, you've already seen these expanded services from your current broker.

But if you're not getting what you need to invest the way you want, there's never been a better time to shop around. Despite the economic downturn, innovation among brokers continues at a breakneck pace. To get the most of it, make sure your broker has all the tools and help you'll need to broaden your investing horizons in more profitable directions.

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Fool contributor Dan Caplinger is pleased with his brokerage accounts. He doesn't own shares of the companies mentioned. Charles Schwab is a Motley Fool Stock Advisor selection. Try any of our Foolish newsletters today, free for 30 days. The Fool's disclosure policy gives you the right tools for the job.