US Financial Brokerage Market will be Driven by Rise in Dealership Activities and Increasing Adoption of Technology: Ken Research

June 2019  

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 stockbrokers which provide good service at 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 Market

For More Information, Refer To Below Link:-

The US Financial Brokerage Market Outlook

Related Reports:-

India Financial Brokerage Market Outlook to 2020 - Evolvement of Discount Brokers and Robust Trading Volume to Prosper Market Growth

US FinTech Market Forecast to 2020 - Mobile Payments and Robo Advisors to Shape Future Growth

India ATM Market Outlook to 2023 - By ATM Supply, Managed Services (ATM Repair, Maintenance and Other Services, Transaction Processing, Cash Reconciliation Statement, Content and Electronic Journal Management) & Cash Management (ATM Replenishment, CIT, CPD)

Contact Us:-
Ken Research
Ankur Gupta, Head Marketing & Communications
Sales@kenresearch.com
+91-9015378249