The Competitive Landscape: Online Brokers and Other Brokers
Because of their competitive pricing and streamlined trading processes, internet brokers have quickly become a viable alternative to more conventional financial intermediaries.
These online brokers and others like discount and zero commission brokers serve many customers, from individual investors to institutional investors looking to save money.
Depending on their business model, broker generates revenue in various ways, including receiving compensation for client orders, forming strategic alliances with liquidity providers, and charging clients commission or subscription fees for access to premium services.
Dealing Fees and Commission Fees: How Brokers Charge Clients
There is no standard method through which brokers assess fees to their customers. Brokers may charge customers dealing fees in exchange for facilitating deals on their behalf. Both flat rates and percentages of the trade’s total value are acceptable forms of these fees.
Some brokers also impose commission fees, which are a tiny fraction of the total value of the transaction of the commission broker itself, in addition to the dealing cost. The costs of trading a particular financial instrument will vary from broker to broker.