3 ms·
I think you actually have things backwards. Charles Schwab cut their trading fees before Ameritrade did and this move to $0 trading fees affected CS less than A
by whyhow 7y ago
I think you actually have things backwards. Charles Schwab cut their trading fees before Ameritrade did and this move to $0 trading fees affected CS less than Ameritrade because CS makes more money from other sources.
An interesting article about it:
https://www.bloomberg.com/opinion/articles/2019-11-21/schwab-broke-ameritrade-to-buy-it https://www.bloomberg.com/opinion/articles/2019-11-21/schwab...
- beatgammit 7y agoI think most brokerages make the bulk of their money on interest for margin trades and management fees. I read about Fidelity's new 0% ER funds (e.g. FZROX), and it's a loss leader for their larger margin business. Schwab has a good business going with offering mutual funds and retirement accounts, but I don't think they have a solid margin business, but I think TD Ameritrade does, which is likely why they're making this acquisition.