Discount brokerage

A discount brokerage is a business that charges clients significantly lower fees than traditional brokerages, typically offering comparatively fewer services and/or support.



In the securities industry, a discount brokerage helps clients buy and sell securities on a stock exchange. Discount brokerages usually allow their clients to trade for their own account with little or no action with a live broker. Some brokers, like Bank of America, have now offered no-commission trades to their clients that have a specific amount of money with them.

Discount brokers, like TD Ameritrade, PTI Securities & Futures and E-Trade, also provide advanced trading systems, which is why they appeal most to frequent and active traders. Beginner investors may turn away from discounted brokers because of the advanced systems and terms, and instead go to traditional brokers.

Whether you deal with a discount brokerage, a full-service discount brokerage, or a traditional brokerage, most brokers are regulated and licensed by a local authority. In the U.S., the Financial Industry Regulatory Authority (FINRA) oversees brokerages, and consumers can do an online search to check the broker's standing at [1]. In the UK, the Financial Services Authority, handles regulation of brokerage firms.

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Real estate

In the real estate industry, a discount brokerage helps clients buy and sell real estate properties, often listed on the MLS. The growth of discount real estate brokers has caused considerable concern with their full-service, full-fee competitors. In the US, the US Justice Department settled in 2008 with the National Association of Realtors to allow discount brokers to have access to the same MLS home listings as full-service agencies [1]

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