In October, Bank of America and Zecco.com each announced plans to offer clients zero commissions on stock trades. Zecco.com announced that for a minimum deposit of $2,500 a customer can receive up to 40 free trades a month, with up to 10 trades occurring on any given trading day of that month. A week later, Bank of America offered clients with $25,000 or more in combined deposit accounts up to 30 free online equity trades per month.
According to TowerGroup, a research and consulting firm, "zero-commission pricing is not new; it just has not succeeded to date." Furthermore, new research from a TowerGroup report titled Zero Commissions in Online Brokerage: Rounds Two and Three by Matt Bienfang, research director in the brokerage and wealth management practice at TowerGroup, finds that the choice of these two firms to offer zero commission will "put additional pressure on commission pricing across the retail brokerage industry."
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
