The rise in the demand for portfolio management and advisory services coupled with rising in compliance costs due to growing regulatory the environment has driven the financial brokerage market in the US.
The report Titled “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)” by Ken Research suggested that the Financial Brokerage market in the US has been increasing due to growing dealership activity, rising investment in Fin-tech industry and increasing adoption of technology. The market is expected to register a positive CAGR of 3.4% in terms of revenue during the forecast period 2018-2023E.
This has resulted in many financial advisors switching to smaller firms or become independent advisors, as the new positions offer them a greater share of the trade margins along with other perks such as profit sharing agreements, partnership deals and so on. It has been witnessed that the large warehouses are consolidating their business due to the reduced trade commissions and rising operational costs owing to stringent trade regulations. The number of FINRA registered representatives in large firms reduced at a CAGR of -0.5% during the period 2015-2017.
The outflow of Financial Advisors (FAs) From Large Wire Houses to Smaller Advisory Firms: Post the US economic recession in 2008, large established wirehouses such as Merril Lynch, Wells Fargo, and UBS have altered their growth strategy by focusing more on consolidating their advisor base. These firms focused on servicing a few clients with large asset bases rather than scaling their client base, which has also led to a reduction in their branches. Over the last 5 years, these warehouses have reduced the perks provided to the financial advisors under their payroll. These FA’s are also required to generate portfolios of over USD 1 million in order to retain the interest of their employers.
Rise In Mobile Applications Providing Zero Commission Trading Facility: Brokerage firms often charge their clients with commissions on-trade by trade basis in order to cover their overhead costs, infrastructure costs and include profits. However, owing to technological advancements, the fintech industry has witnessed a rise in the number of firms offering commission-free trades. With an aim to make trading facilities affordable to the general public, these firms leverage technology to minimize their costs and develop a mobile application that caters to the basic trading needs of an investor.
Decrease In Brokerage Rate And Expansion Of Financial Services: High competition in the brokerage market in America, 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. In addition to this, the companies have drastically lowered down the brokerage fees since fees have been regarded as the major pain point for the investor. The revenue from commissions has declined at a CAGR of 1.6% between Q1 2013 and Q1 2018. The increase in the trend of discount brokerage services in the country had also forced the companies to lower their commissions. The investors choose those stock brokers which provide good service in affordable rate to the investors.
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: 2013-2018
Forecast Period: 2019E-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
Keywords:- Financial Broking Charles Schwab US Financial Broking Exchange Market US Financial Broking F&O Market US Financial Brokerage US Discount Brokers Industry US US Full Service Brokerage Industry US Electronic Security Trading Platform Market Agriculture Commodities Market US Non-Agriculture Commodities Market US US Equity Trading Transaction Volume Financial Broking Options Exchange Market US Financial Broking Discount Market US Financial Broking SIFMA Share US Financial Brokerage in the US Commodity Trading in the US Discount Brokerage Market US Equity Trade Market US Future and Options Trading Market US US Online Stock Trading MarketFor More Information, Refer To Below Link:-
The US Financial Brokerage Market Outlook
Related Reports:-
US FinTech Market Forecast to 2020 - Mobile Payments and Robo Advisors to Shape Future Growth
Contact Us:- Ken Research Ankur Gupta, Head Marketing & Communications Ankur@kenresearch.com +91-9015378249
