Showing that you can never discount a discounter's reputation, Charles Schwab
Who is in the wrong here? That question is now in the hands of the judicial system. I think the one nugget to take away from all of this is that discounters have become so empowered over the years that they now have no problem taking shots at one another.
Leading discount brokers like E*Trade
Discount brokers, including Schwab, have been cutting rates lately. While that may make TD Waterhouse's marketing comparisons ill-advised, Schwab has never pitched itself as the cheapest broker in town. Even the deep discounters prefer to tout their services over their rock-bottom commissions.
Yet this lawsuit, beyond attracting attention to the various commission schedules out there in the discount world, may help Schwab -- and even Waterhouse -- if it draws attention back to how cheap stock trading has become at the larger discounters in recent years.
Schwab can certainly use the boost. Its shares are trading at a quarter of where they were five years ago. Then again, annual net revenues have fallen from $7.1 billion to $4.5 billion in that time. A lawsuit may be a peculiar marketing strategy, but for Schwab, it may be just what the lawyer ordered.
Yearn to learn beyond the turn of the churn?
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Longtime Fool contributor Rick Munarriz has been investing through online discount brokers since 1991. He likes the sector's chances, but he does not own shares in any companies mentioned in this story. The Fool has a disclosure policy. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.