Discount brokerage
Encyclopedia
A discount brokerage is a business that charges clients significantly lower fees than traditional brokerages, typically offering comparatively fewer services and/or support.
. Discount brokerages usually allow their clients to trade for their own account with little or no action with a live broker. Some brokers, like Bank of America
, have now offered no-commission trades to their clients that have a specific amount of money with them.
Discount brokers, like TD Ameritrade
, PTI Securities & Futures
and E-Trade, also provide advanced trading systems, which is why they appeal most to frequent and active traders. Beginner investors may turn away from discounted brokers because of the advanced systems and terms, and instead go to traditional brokers.
Whether you deal with a discount brokerage, a full-service discount brokerage, or a traditional brokerage, most brokers are regulated and licensed by a local authority. In the U.S., the Financial Industry Regulatory Authority (FINRA) oversees brokerages, and consumers can do an online search to check the broker's standing at http://www.finra.org/Investors/ToolsCalculators/BrokerCheck/index.htm. In the UK, the Financial Services Authority
, handles regulation of brokerage firms.
properties, often listed on the MLS
. The growth of discount real estate brokers has caused considerable concern with their full-service, full-fee competitors. In the US, the US Justice Department settled in 2008 with the National Association of Realtors
to allow discount brokers to have access to the same MLS home listings as full-service agencies
Securities
In the securities industry, a discount brokerage helps clients buy and sell securities on a stock exchangeStock exchange
A stock exchange is an entity that provides services for stock brokers and traders to trade stocks, bonds, and other securities. Stock exchanges also provide facilities for issue and redemption of securities and other financial instruments, and capital events including the payment of income and...
. Discount brokerages usually allow their clients to trade for their own account with little or no action with a live broker. Some brokers, like Bank of America
Bank of America
Bank of America Corporation, an American multinational banking and financial services corporation, is the second largest bank holding company in the United States by assets, and the fourth largest bank in the U.S. by market capitalization. The bank is headquartered in Charlotte, North Carolina...
, have now offered no-commission trades to their clients that have a specific amount of money with them.
Discount brokers, like TD Ameritrade
TD Ameritrade
TD Ameritrade is an American online broker with over 6 million U.S. customers, and many more internationally, that has grown rapidly through acquisition to become the 746th-largest US firm in 2008. TD Ameritrade Holding Corporation is the owner of TD Ameritrade Inc...
, PTI Securities & Futures
PTI Securities & Futures
PTI Securities & Futures is a money management, securities and discount brokerage firm with offices in Chicago, Illinois and Glendale, Arizona...
and E-Trade, also provide advanced trading systems, which is why they appeal most to frequent and active traders. Beginner investors may turn away from discounted brokers because of the advanced systems and terms, and instead go to traditional brokers.
Whether you deal with a discount brokerage, a full-service discount brokerage, or a traditional brokerage, most brokers are regulated and licensed by a local authority. In the U.S., the Financial Industry Regulatory Authority (FINRA) oversees brokerages, and consumers can do an online search to check the broker's standing at http://www.finra.org/Investors/ToolsCalculators/BrokerCheck/index.htm. In the UK, the Financial Services Authority
Financial Services Authority
The Financial Services Authority is a quasi-judicial body responsible for the regulation of the financial services industry in the United Kingdom. Its board is appointed by the Treasury and the organisation is structured as a company limited by guarantee and owned by the UK government. Its main...
, handles regulation of brokerage firms.
See also
- Charles Schwab Corporation
- E-Trade
- PTI Securities & FuturesPTI Securities & FuturesPTI Securities & Futures is a money management, securities and discount brokerage firm with offices in Chicago, Illinois and Glendale, Arizona...
- ScottradeScottradeScottrade is a privately owned American discount retail brokerage firm headquartered in St. Louis, Missouri. Its Founder, President and CEO is Rodger O. Riney. Scottrade has 500 branch offices around the U.S...
- SogoTrade
- TD AmeritradeTD AmeritradeTD Ameritrade is an American online broker with over 6 million U.S. customers, and many more internationally, that has grown rapidly through acquisition to become the 746th-largest US firm in 2008. TD Ameritrade Holding Corporation is the owner of TD Ameritrade Inc...
Real estate
In the real estate industry, a discount brokerage helps clients buy and sell real estateReal estate
In general use, esp. North American, 'real estate' is taken to mean "Property consisting of land and the buildings on it, along with its natural resources such as crops, minerals, or water; immovable property of this nature; an interest vested in this; an item of real property; buildings or...
properties, often listed on the MLS
Multiple Listing Service
A multiple listing service is a suite of services that enables real estate brokers to establish contractual offers of compensation , facilitates cooperation with other broker participants, accumulates and disseminates information to enable appraisals, and is a facility for the orderly...
. The growth of discount real estate brokers has caused considerable concern with their full-service, full-fee competitors. In the US, the US Justice Department settled in 2008 with the National Association of Realtors
National Association of Realtors
The National Association of Realtors , whose members are known as Realtors, is North America's largest trade association. representing over 1.2 million members , including NAR's institutes, societies, and councils, involved in all aspects of the residential and commercial real estate industries...
to allow discount brokers to have access to the same MLS home listings as full-service agencies
See also
- Assist-2-SellAssist-2-SellAssist-2-Sell is a real estate franchise organization in the United States and Canada. It was founded in 1987 by Mary LaMeres-Pomin and Lyle E. Martin and is based in Reno, NV....
- Reduced-commission MLS ListingsFlat fee mlsFlat Fee MLS generally refers to the practice in the real estate industry of a seller entering into an "à la carte service agreement" with a real estate broker who accepts a flat fee rather than a percentage of the sale price for the listing side of the transaction. The buyer's broker is still...
- Real estate brokerReal estate brokerA real estate broker, real estate agent or realtor is a party who acts as an intermediary between sellers and buyers of real estate/real property and attempts to find sellers who wish to sell and buyers who wish to buy...