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.
“This is only benefiting the individual investor,” Andre Scheluchin, an editor of the “Discount Brokerage Survey,” published by Mercer Inc. in New York, was quoted as saying. “If an individual investor is trying to save some money, online trading is where to do it.”
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.