After cutting commissions to $0, which resulted in relatively steep declines in share prices for TD Ameritrade (26% down), E*TRADE (16% down) – compared to Schwab’s ~10% down move…News breaks today that SCHW is now in talks to acquire Ameritrade.
makes sense to consolidate. these brokerages are really banks at this point with added service. i am thinking of closing my bank and moving to a brokerage completely so its all in one.
I don’t know if standalone brokerages can stay in business with zero commissions. Bigger institutions with diversified operations have more potential uses for capital from brokerage accounts. So, it does seem to make sense that more of them will merge or get acquired.
If they eventually buy enough assets to waive fees on, profit!