First Research US Industry Profile

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Securities Brokerages
SIC Codes: 6211
NAICS Codes: 52312
Last Quarterly Update: 5/6/2019
Companies in this industry broker deals for buyers and sellers of securities. Major companies include TD Ameritrade, E*Trade, and Charles Schwab, and brokerage units of Citigroup and Wells Fargo (all based in the US), as well as Credit Suisse (Switzerland), Deutsche Bank (Germany), Macquarie Group (Australia), and Nomura (Japan).
Many large US-based brokers, particularly those affiliated with major banks and financial services companies, operate internationally. Major global financial hubs include Hong Kong, London, New York, and Singapore. London's status as a global financial center has been cast into doubt following the UK's decision in 2016 to leave the European Union.
The securities brokerage industry in the US includes about 40,000 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $122 billion. The industry is consolidating: since 2010, the number of brokerage firms in the US has fallen by about 20%, according to FINRA.
Competitive Landscape
Demand is driven by the returns on securities relative to alternative investments. The profitability of individual companies depends on efficient operations and good marketing. Large companies have economies of scale in operations and high name recognition. Small companies can compete effectively by offering better customer service. The US industry is highly concentrated. Four firms (ranked by customers and assets) -- TD Ameritrade (owner of Scottrade), E*Trade, Fidelity Investments, and Charles Schwab -- dominate the business in the US. Discount brokerage firms, which originated in the mid-1970s when stock-trading commissions were deregulated, have become major industry players.
The traditional brokerage industry that sold stocks to individual investors has largely evolved into companies that either broker large stock trades for institutional investors or sell a variety of investment products to individuals. However, reforms enacted in the aftermath of the late-2000s financial crisis have largely put an end to banks and large hedge funds making vast sums buying and selling securities. Investors' growing appetite for low-cost passive investments has depressed prices on everything from advice and asset management to trading. Pricing pressure is increasing as major brokerage firms reduce commissions -- to zero in the some cases -- on online stock trades in an intensifying competition for customers.
Products, Operations & Technology
Major sources of revenue are investment advice and management; brokerage of stocks, mutual funds, and other financial products; and fiduciary fees for ... plus:
Sales & Marketing
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Finance & Regulation
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Regional & International Issues
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Human Resources
Also includes the following chapters:
Quarterly Industry Update
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Industry Indicators
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Business Challenges
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Trends and Opportunities
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Call Preparation Questions
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Financial Information
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Industry Forecast
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Industry Websites
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Glossary of Acronyms

Historical Profiles (PDF format)

02/04/2019
10/29/2018
07/30/2018
04/30/2018
01/29/2018
10/16/2017
07/10/2017
04/10/2017
01/09/2017
09/26/2016
06/27/2016
03/28/2016
12/21/2015
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06/22/2015
03/30/2015
01/05/2015
10/06/2014
07/14/2014
03/31/2014
01/06/2014
09/30/2013
07/08/2013
04/15/2013
01/21/2013
10/15/2012
07/30/2012
05/07/2012
02/06/2012
10/24/2011
07/25/2011
04/11/2011
01/03/2011
10/04/2010
06/28/2010
03/29/2010