Price Wars in the Online Brokerage Biz
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Competition can be good for the consumer, and nowhere is this more evident than in the brokerage fees charged by online stock trading firms.
The average commission for the 10 leading online brokerage firms had dropped from nearly $53 in early 1996 to about $32 the middle of last year, about a 40% decline, according to The New York Times.
But by late 1997 that average was down even further, to about $16, according to researchers at Piper Jaffray. Some brokers have even pushed online commissions into the single digits; Ameritrade and Suretrade have a basic rate of about $8.
And the Times said that interviews with experts--including those who say they look out for the average investor--indicate that these offers are, for the most part, a very good deal.
And, a new online survey by the American Association of Individual Investors found that people were generally pleased with the quality of online trades, too. Less than 5% of the 350 people surveyed were dissatisfied with the price they got or the speed of the execution.