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Now relegated to the ranks of working for another firm on commission, he's making almost nothing. He can't afford to pay for counseling treatment. How many other brokers out there are currently facing a similar predicament? |
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As more investors migrate to the Internet, brokers will be used only by the very well-to-do, who don't care to take the time to manage their own investments, or don't mind paying exorbitant fees for the luxury of having a professional do it for them. Some will keep an account with a traditional brokerage to increase their chances of getting shares of lucrative IPOs. |
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Full-service brokers will be used by those who simply don't believe they have the knowledge or interest to manage their own investments. And they will act as consultants to provide feedback regarding your own thinking. |
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Brokers already are forced to compete with financial planners, helping people deal with estate planning, trusts, and retirement issues. |
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It seems inevitable that the cost for stock trades will steadily go down. This is because competition and increased online trading volume will force online brokerage houses to outdo each other with more and more attractive offerings. They will be trying to win new customers and steal customers from competing houses. Instead of only one online broker offering a fee of $5, we will have many. |
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Before long, online brokerage houses may even allow you to trade absolutely free, just to get your account, especially if you have a large amount of money to place with them. If you think this just can't happen, wait and see. Increased electronic trading by individuals is going to truly turn the brokerage industry upside down. |
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Three months after I wrote the preceding paragraph, this piece of news came out: ''The chief executive of Lucent Technologies predicted on Tuesday that free stock trades on the Internet will be announced within a year. 'There is no doubt in my mind that within the next 12 months someone of substantial repute will announce they're going to provide trades free online, with the value of you coming to their (Web) site for other services,' Rich McGinn, chief executive of the New Jersey-based telecommunications equipment supplier, said." (Reuters News, September 14, 1999) |
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And then, two months after the previous news item, comes this: American Express announces in a full-page ad that account holders with $100,000 will trade free, up to 3000 shares per trade. Those with |
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