Evolution of Brokerage Services
Before 1975, it was extremely difficult for small investors to trade profitably due to high commissions, which were required. The cost of trading was fixed by exchange rules, and the commission was the same for both large and small orders. Thus, trading was only cost effective for large institutional investors.
That changed on May 1, 1975, with the adoption of an SEC rule that permitted brokerage firms to charge any commission they wanted.
This change introduced the era of discount brokerage firms, which have permanently transformed the financial industry.
At that time, the Internet didn’t exist. Traders had to call brokers over the phone to place trade orders, often specifying a target price. By the time the order was executed, the actual price might have changed significantly.
In the 21st century, this process has evolved. It is now simpler than ever to open a brokerage account online and invest in nearly any asset class at a time and price that you choose.
Thanks to the Internet and advanced computer software, this process, which used to take days if not weeks
before the advent of the telephone, now takes place at the speed of light. Besides speeding up the
process and bringing it to the masses, modern technology has also reduced the cost of trading and investing to an absolute bare minimum—$0 in many cases.
What this monumental shift means today is that finance is no longer the purview of the world’s elite or
well heeled. Now, it is available to just anyone with an Internet connection and a desire to become a
self-made enterpriser.
Not that any result is guaranteed, however. The world of asset trading has always been fraught with risk—and still is. But the opportunity has been opened, and that creates a new world, a world with possibilities that heretofore have never existed.
Welcome to that new world. You can choose to either adapt or be left behind. This website will help you to adapt.
Ongoing Innovations
The process of change isn’t finished. It’s an ongoing development that is generating brand new financial realms the world has never seen before. Cryptocurrencies are the most famous example of this fintech revolution.
And yes, it is a revolution. For the first time ever, currencies are being created by private individuals rather than central banks. This is unchartered territory, which means the risk level is high. But the new investment space is there, and it’s not going away.
Some online discount brokerage firms that previously focused only on securities trading now also provide cryptocurrency trading. At Brokerage-Review.com, you can find our analysis of these firms.
The digital tools required for trading cryptocurrencies and other asset classes have significantly improved in recent years.
Long gone are the days of Netscape and simple web pages. Today, many online discount brokers (although not all) have rolled out advanced trading software for self-directed clients that competes with any platform available to professional traders. On top of this phenomenal offering, most brokers who offer these software platforms have recently eliminated fees and minimums originally required to gain access to these trading tools, which makes them a fantastic bargain for virtually anyone.
Some brokerage firms have taken the digital tools to a whole new level: software that will make trading decisions for you. Called robo accounts, these are investment-advisory services that use computer algorithms to do the actual trading, taking the traditional need for research and investment acumen completely out of the picture for both the customer and the original human investment advisor.
Sorting through Online Discount Brokers
The tectonic changes in the investing world have created a competitive landscape for brokerage houses vying for investor business. On one hand, it means lower prices; but on the other, it means a large sea of choices. This is where we come in: our job is to help investors sift through the myriad choices available to them today.
Brokerage-Review.com covers many investment firms that offer the services already mentioned plus quite a few more: low-cost securities trading, robo investing, crypto trading, unique cash management tools, and the list goes on.
Our research is based on clear and detailed comparisons that focus on what a brokerage firm provides—and what it doesn’t.
Traditional Investing Is Still Available
Even with the major changes in the brokerage industry over the past few decades, traditional investment services with human financial advisors making decisions for clients still exist. We review these brokers as well; in fact, some of them also offer cutting-edge services. Charles Schwab, one of the first discount brokers, is a prime example.
The Future of Investing
Investing continues to evolve. As it does, Brokerage-Review.com will keep analyzing brokerage firms and sharing its findings. No matter what products emerge in the future or what your experience level is, you’ll find clear and actionable insights. Stay tuned.