What Are The Biggest Discount Brokerage Firms?

Triston Martin

Apr 16, 2022

The development of discount brokerages, which allow consumers to buy and sell stocks at a cheap cost and without a human stockbroker, has been one of the most dramatic advances in investing in the previous quarter-century.

Individual investors may now buy shares of practically any security via the Internet with relative ease. The stock market and the economy have significantly benefited from this development, making investment more accessible to the average individual.

What Exactly Is A Brokerage Firm?

Brokerage firms act as agents for their clients in purchasing and selling a wide range of financial instruments. The most excellent approach to combine resources and provide the most satisfactory service is for brokerages to employ individual brokers. On the other hand, financial services businesses often have their own brokerage houses.

When it comes to building a successful financial strategy, finding the right brokerage business might be crucial. Please continue reading this article if you'd like to understand more about brokers and how they work.

Brokerage Firms: What Do They Do?

As a middleman between buyers and sellers of financial instruments, a brokerage business functions as a broker. In most cases, customers instruct their broker on which stocks to buy and sell and at what time. Sometimes, brokerage companies go beyond the typical middleman function by giving advice on which stocks to purchase and sell, the risks, and how various trades might affect your investment portfolio.

Brokerage businesses often employ a team of brokers to serve their clients. You'll need a broker to increase your investing possibilities beyond what you'd get from your bank.

An Overview of A Brokerage Firm

Trades can be made on the stock markets through a broker. You will be charged a brokerage fee for these services. Some brokerage firms impose yearly account maintenance fees, but this is more common per-trade.

When you create a brokerage account, you'll be asked for your name, contact information, and bank account details. While many brokerages allow you to establish an account online, it is possible to open an account in person at a branch office in some situations. Yo

What Exactly Is A Discount Stock Brokerage?

In contrast to a full-service brokerage that provides more services, a cheap brokerage is a stripped-down, bare-bones alternative. This might imply that you're not working with a team of experts devoted to helping you learn how to increase your money.

Although you may pay a lesser brokerage cost — often a fixed, per-trade price — for this service. Several cheap brokerages are available online, allowing you to make low-cost investments straightforwardly.

You can save a lot of money by using a low-cost discount brokerage and doing your own investing, but you'll be sacrificing the expertise of a team of financial experts in the process. This option is best for those with a modest account or just interested in simple, easy investments.

When Do You Have A "Full-Service" Brokerage?

In addition to the fundamentals, full-service brokerages provide more. They provide a wide range of other services, including tax preparation, research, financial counseling, estate, retirement planning, and executing trades.

In most cases, a full-service brokerage has a specialized broker who can meet with you and give individualized advice based on your unique circumstances. Traditional full-service brokerages typically charge a fee, commission, or both for the additional services.

Regular stock orders can cost up to $20 per transaction, but many brokers have adopted a model where you pay an annual fee for all services regardless of how often you trade. One to two percent of the total assets under management is typical.

1. Charles Schwab

It was established in 1971 and is situated in San Francisco. In the United States, it is one of the most prominent investment brokers and IRA custodians.

Charles Schwab has $4.04 trillion in customer assets and 12.3 million active brokerage accounts at the end of the most recent year. Customers may link their trading accounts to a checking account at Schwab Bank, one of America's major financial institutions.

As of 2019, the firm has 1.4 million active banking accounts. In addition to stock, mutual funds, exchange-traded fund (ETF), money market fund, fixed income product, futures, insurance, and annuities. In addition to Schwab's products, clients can also invest in third-party assets.

2. Fidelity Investments

Fidelity Investments is the largest 401(k) holder in the United States for retirement savings. Fidelity Management and ' Research was founded in 1946 and is headquartered in Boston.

As of June 2021, Fidelity has $11.1 trillion in customer assets and 82.8 million active brokerage accounts, according to the company's website. 38 million individual investors and over 2.6 million commissionable trades every day also boasted of the corporation.

Fidelity is the best option if you're looking to invest in Fidelity ETFs and mutual funds through a brokerage. Investments in third-party items are also available through the organization.


To this day, E*TRADE is the most popular online discount brokerage service globally. During the financial crisis of 2007-2008, the corporation had a large number of subprime mortgage portfolios.

E*TRADE has become a significant financial institution thanks to its mobile accessibility, online trading tools, and user-friendly customization options after the company's turnaround.

With more than $5.22 million in retail brokerage accounts and $360 billion in customer assets as of February 2020, E*TRADE is the largest online broker in the world.


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