Evolution of Brokerage Services
Before 1975, it was very hard for small investors to trade profitably because of the high commissions they had to pay. The cost of trading was set by exchange rules, and the commission was the same for big and small orders. As a result, trading only made sense for large institutional investors.
That changed on May 1, 1975, when the SEC adopted a rule allowing brokerage firms to set any commission they liked.
This change brought on the era of discount brokerage firms, which have forever reshaped the financial world.
At that time, the Internet didn’t exist. Traders would call brokers on the phone to place orders, often with a specific target price in mind. By the time the order got filled, the price might have changed a lot.
In the 21st century, this process has changed dramatically. It’s now easier than ever to open a brokerage account on the web and invest in almost any type of asset whenever and at whatever price you choose.
Thanks to the Internet and sophisticated computer programs, this activity—which used to take days or even weeks before the telephone—now happens in mere moments. Beyond speeding things up and making them widely accessible, modern tech has driven the cost of trading and investing down to almost nothing—often $0.
What this huge shift means today is that finance is no longer reserved for the world’s elites or wealthy individuals. Now, it’s open to anyone with an Internet connection who wants to be a self-starter.
Of course, no outcome is guaranteed. Asset trading has always carried risks—and it still does. But the door has been opened, and that creates a new environment, one filled with possibilities never seen before.
Welcome to this new landscape. You can either adapt or be left behind. This website will help you adapt.
Ongoing Innovations
The evolution isn’t over. It’s an ongoing trend that is creating entirely new financial frontiers the world has never witnessed. Cryptocurrencies are the most famous case of this fintech movement.
And yes, it is a revolution. For the first time ever, private individuals—not central banks—are creating currencies. This is unexplored territory, which means the risk is significant. But this new area of investing is here to stay.
Some online discount brokerage firms that used to focus solely on stock trading now also offer crypto trading. At Brokerage-Review.com, you can read our evaluations of these firms.
The digital tools needed for trading cryptocurrencies and other asset types have become much better over the last few years.
The days of Netscape and simple websites are long gone. Today, many online discount brokers (though not all) have launched sophisticated trading programs for self-directed traders that can match what professionals use. Moreover, most brokers providing these platforms have recently dropped the fees and minimums once required to access them, making these tools a fantastic deal for just about anyone.
Some brokers have pushed digital tools even further: they offer software that makes the trading decisions for you. Called robo accounts, these are advisory services powered by computer algorithms that handle the trading itself, taking away the traditional need for both client and advisor to do research and make judgments.
Sorting through Online Discount Brokers
The massive shifts in the investing space have created a competitive environment for brokerage firms seeking clients. On one hand, that means lower costs; on the other, it means lots of choices. This is where we come in: we help investors sort through the many options available today.
Brokerage-Review.com covers many companies offering the services we’ve talked about, plus even more: inexpensive stock trades, robo investing, crypto trading, unique cash management tools, and the list goes on.
We base our research on straightforward and thorough comparisons that highlight what each broker offers—and what it doesn’t.
Traditional Investing Is Still Available
Even with the big changes in brokerage over the decades, traditional investment services where human advisors make decisions for clients still exist. We review these companies too; in fact, some of them also provide cutting-edge tools. Charles Schwab, one of the earliest discount brokers, is a perfect example.
The Future of Investing
Investing keeps changing. As it does, Brokerage-Review.com will continue to evaluate brokerage firms and share what we learn. No matter what appears on the market tomorrow or what your skill level is, you’ll find clear and useful analysis here. Stay tuned.