US Financial Brokerage Market Outlook to 2023
By Entity (Brokers and Dealers), By Type of Trading Activity (Currency, Commodity and Equity), By Exchange, By Type of Commodities (Agriculture and Non Agriculture)
Region:North America
Product Code:KR817
June 2019
172
About the Report
Market Overview
The US currently has the largest financial market in the world with the highest market capitalization, representing the majority of the world’s market capitalization. It is by far the most regulated and sophisticated financial market in the world. Owing to high competition in the brokerage industry, the existing companies and incumbent players have devised strategy related to lowering down the brokerage fees and expanding financial services towards asset management, mutual funds, wealth management, algorithmic trading, top picks and other services that can lure the customers. The industry grew at a positive CAGR during this period. In 2018, the majority of the revenue from a registered broker-dealer came from dealership activities such as portfolio management services, advisory services, and research support. The overall revenue in the financial brokerage industry witnessed a rising trend on account of a reduction in corporate tax for businesses and a falling rate of unemployment.
U.S Financial Brokerage Market Segmentation
By Type of Trading Activity: In the financial brokerage market, equity segment has dominated the overall market in terms of transaction volume throughout 2013-2018 which was supplemented by higher liquidity in equity, issuance of bonus shares in few instances thereby justifying the considerable share of equity in the overall market. Commodities on the other side have been the second largest category in the financial market, in terms of transaction volume over the years resulting from an attractive risk/return ratio. The currency market is considered to be as the least volatile segment since the variations in the currency rates tend to be extremely lower.
By Entity: The share of dealership revenue in the overall revenue from financial brokerage market has been steadily increasing between 2013 and 2017, which is on account of increased demand for portfolio management services and advisory services by the investors. In 2018 the dealership has dominated the financial brokerage market in terms of revenue share and accounted for more than half of the share in the market. On the other hand, brokerage accounted for the remaining share.
By Exchange: In 2013, ICE acquired NYSE Euronext, the parent company of the New York Stock Exchange, as a result of which ICE got the privilege to run NYSE’s trading floor and the highest number of contracts executed in 2018 in the exchange was recorded for gas, while coffee witnessed the highest growth in the number of contracts, growing at a double-digit CAGR during the period 2013-2018. The exchange suffered a decline in transaction volume at a single digit CAGR during the period 2013-2018 as its market share was being absorbed by CME.
By Type of Commodities: In the US, the commodities market has been dominated by non-agricultural commodity trades as they consistently comprised over 90% of the total contract volumes every year between 2013-2017. Amongst the non-agricultural commodities, equities, interest rates, and energy contracts have dominated the segment. The primary reason behind the dominance of non-agricultural commodity contracts is due to the nature of the US economy, as it is more inclined towards industries than agriculture.
Competitive Landscape
The U.S Financial Brokerage market is highly concentrated in nature and is consolidating at the moment. LPL Financial is the market leader and has the highest market share in the Financial Brokerage market in the US on the basis of revenue in 2017. This was followed by Ameriprise Financial Services Inc, Raymond James Financial Services Inc., Interactive Brokers, Commonwealth Financial Network, MML Investors Services, and others. These market players compete in the brokerage market in the USA on the basis of commissions charged, quality of supplementary services and technology and reputation.
U.S Financial Brokerage Market Future Outlook
The total revenue from US Financial brokerage Industry is expected to rise at a positive CAGR during the period 2018 - 2023E. This is mainly supported by the projected rise in dealership revenue as its contribution towards the overall revenue is expected to rise at a positive CAGR during the same period. There are many reasons behind this growth, with the first one being a rise in financial inclusion of the overall population as technology will be leveraged to expand the area of operations. Moreover, improvements in technology will lead to a reduction in operational costs, the benefit of which can be passed on to the consumers as brokerage firms compete to stay relevant in the market. It is also estimated that an increase in market volatility resulting from the rise of new industries such as renewable energy, switch to electric mobility along with massive fluctuations in crude oil prices, US-China trade war, global warming and so on combined with global political uncertainties such as Brexit and unrest in the middle east is expected to drive up the contract volumes of F&O contracts, which is expected to rise at a positive CAGR during the period 2018 - 2023.
Key Segments Covered
By Type of Trading Activity
Equity
Commodities
Currencies
By Entity
Brokers
Dealers
By Exchange
By Type of Commodities
Agriculture
Non Agriculture
Coffee
Sugar
Cocoa
Cotton
FCOJ
Metals & Grains
Canola
Gas
Power
Key Target Audience
Brokers
Dealers
Investment Banking and Private Equity Firms
Government Authority
Financial Institutions
Time Period Captured in the Report:
Historical Period: FY’2013-FY’2018
Forecast Period: FY’2019E-FY’2023E
Companies Covered:
BGC Partners
Charles Schwab
E-Trade Financial Corporation
Interactive Brokers Group
TD Ameritrade
Jones Financial
LPL Financial
Raymond James Financial
Voya Financial
Virtu Financial
Key Topics Covered in the Report
Executive Summary
Research Methodology
Introduction on US Financial Brokerage Market
Educational Training Programs in U.S Financial Brokerage Market
Financial Brokerage Market Size
US Financial Brokerage Market by Revenues
US Financial Brokerage Market by Transaction Volume
US Financial Brokerage Market Segmentation of Financial Brokerage Market by equity, commodities and currencies on the basis of transaction volume, by equity market , by F&O market, by commodity market, by agricultural commodities, by non agricultural commodities
US Financial Brokerage Market Government Regulation
US Financial Brokerage Market Trends and Developments
US Financial Brokerage Market Issues and Challenges
Comparative Analysis of U.S Financial Brokerage Market with Global Market
Competition Scenario and Market Share of Major Players in Comparative Analysis of U.S Financial Brokerage Market
Company Profile of Major Players in Comparative Analysis of U.S Financial Brokerage Market
US Financial Brokerage Market Future Outlook and Projections
Analyst Recommendations
Products
By Type of Trading Activity (Equity, Commodities, Currencies), By Entity (Brokers, Dealers), By Exchange, By Type of Commodities (Agriculture, Non Agriculture, Coffee, Sugar, Cocoa, Cotton, FCOJ, Metals & Grains, Canola, Gas , Power)
Companies
BGC Partners, Charles Schwab, E-Trade Financial Corporation, Interactive Brokers Group, TD Ameritrade, Jones Financial , LPL Financial, Raymond James Financial, Voya Financial , Virtu Financial
Table of Contents
1. Executive Summary
1.1. Market Overview and Size
1.2. Market Segmentation
1.3. Competition Scenario
1.4. Future Outlook
2. Research Methodology
2.1. Market Definitions
2.2. Abbreviations
2.3. Market Size and modeling
2.4. Consolidated research approach
2.5. Market sizing – Overall Financial Brokerage Market
2.6. Market sizing – Overall Dealership Market
2.7. Limitations
2.8. Variables (Dependent and Independent)
2.9. Multi Factor Based Sensitivity Model
2.10. Final Conclusion
3. Business Model of US Financial Brokerage Industry
4. Comparative Analysis of USA Financial Brokerage Market with Global Financial Brokerage Market
4.1. Historical Overview
4.2. Present Scenario
5. Investor Education in USA Financial Brokerage Market
5.1. Educational programs for stockbrokers
Continuing education
5.2. Educational programs for investors
6. USA Financial Brokerage Market Size, 2013-2018
6.1. By Revenue from Brokerage, 2013-2018
6.2. By Overall Transaction Volume, 2013-2018
7. USA Financial Brokerage Market Segmentation
7.1. By equity, commodities and currencies on the basis of transaction volume, 2013-2018
7.2. By equity market, 2013-2018
7.3. By F&O market, 2013-2018
7.4. By exchanges, 2013-2018
7.5. By commodity market, 2013-2018
7.6. By agricultural commodities, 2013-2017
7.7. By non agricultural commodities (precious metals, non precious metal and energy products), 2013-2017
7.8. By Revenues from Dealership and Brokers, 2013-2018
8. Investor Profile
8.1. Investor Survey, 2015
8.2. Investing Behavior towards Non Retirement Investments, 2016
9. Trends & Developments in the USA Financial Brokerage Market
9.1. Outflow of Financial Advisors from Large Wire Houses To Smaller Advisory Firms
9.2. Rise in Mobile Applications Providing Zero Commission Trading Facility
9.3. Rising Trading Turnover and Other Adjoining Factors
9.4. Decrease in Brokerage rate and Expansion of Financial Services
9.5. Growth of Fin-tech industry
10. Issues and Challenges in the USA Financial Brokerage Market
10.1. Growing Cyber Threats, Data Breaches and Frauds
10.2. Compliance and Regulatory Issues
10.3. Political Uncertainties
10.4. Competition from Crypto Currency Exchanges
11. SWOT Analysis of US Financial Brokerage Market
12. Government Regulations and Initiatives in USA Financial Brokerage Market
12.1. Role of FINRA
Detect misconduct by enforcing the rules
Discipline those who break the rules
Detect and prevent wrongdoing in the U.S. Markets
Educate and inform investors
Resolve securities disputes
12.1.1. FINRA Registered Firms & Brokers
12.2. Tax Considerations for Market Players in the Sector
Pass through deduction
Corporate income tax rate
Suspension of miscellaneous itemized deductions
Interest expense limitation
12.3. Process & Requirements to open a Brokerage & Trading account in USA
12.4. Process & Requirements to Start Broking Firm In USA
12.4.1. Definition of a Broker and a Dealer
Definition of a broker
Definition of a dealer
12.4.2. Broker-Dealer Registration Process
Minimum Net Capital Requirement For A Broker Dealer
12.4.3. Time Line for Getting Registered
13. Competition Scenario & Major Players in USA Brokerage Market, 2018
13.1. State wise distribution of firms and its branches
13.2. Market share of top financial brokerage firms, 2018
13.3. Marketing Methods Adopted By FINRA Registered Firms, 2017
13.4. Company Profiles of Major Players in US Financial Brokerage Market
13.4.1. BGC Partners
13.4.2. Charles Schwab
13.4.3. E-Trade Financial Corporation
13.4.4. Interactive Brokers Group
13.4.5. Td Ameritrade
13.4.6. Jones Financial
13.4.7. LPL Financial
13.4.8. Raymond James Financial
13.4.9. Voya Financial
13.4.10. Virtu Financial
14. USA Brokerage Market Future Outlook and Projections, 2019-2023E
14.1. Future Outlook and Projections – By Revenues, 2019-2023E
14.2 By Brokers and Dealers, 2018-2023
14.3. Future Growth Drivers
15. Analyst recommendations
Disclaimer
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