How 3 Major Retail Brokerages Are Embracing The Changing Industry

The retail brokerage industry is in a state of flux.

Between the industry-wide transition to zero commissions, to Charles Schwab's SCHW interest in buying TD Ameritrade AMTD, there is a lot of uncertainty about the future of the traditional brokerage business model.

But uncertainty can be a good thing.

Speaking Nov. 19 at the Benzinga Global Fintech Awards, executives from three major retail brokerages—Neel Ray, managing director, corporate development, TD Ameritrade, Nicholas LaMania, head of product & strategy at TradeStation, and Anthony Denier, CEO of Webull—outlined what their respective firms are focused on.

Nicholas LaMania, SVP of Strategic Brokerage Solutions, TradeStation

The biggest takeaway in the move to zero commissions for TradeStation is that it won’t only benefit novice traders and investors.

“You don’t have to be a novice or inexperienced investor to benefit from zero commissions," LaMania said. "That’s really what we got out of this.”

LaMania also said they’ve focused on increasing their educational offerings and making their trading tools more usable for traders of all skill levels.

“We’ve recognized that education is an even more important part of the customer acquisition process and ongoing relationship with the customer than it’s ever been,” he said. “We’re going to have a tool for you, we’re going to have a platform that will grow with you as you go through that journey as you become more experienced and sophisticated.”

Neel Ray, Managing Director Of Corporate Development, TD Ameritrade

Ray said he’s always been focused on finding new revenue streams, but the move to zero commissions only emphasizes that importance.

“Even before the move to zero commissions, the whole premise has been looking for new revenue growth areas. Every investment that we do, there’s either a commercial partnership at the forefront of it or after it.”

Ray specifically cited access to the private markets and sports betting as potential offerings they could soon provide for clients.

“I think a lot of the things we’re looking at in terms of new capabilities and new products is all about bringing new people into our ecosystem," he said. "It’s all about expanding the pie and then crossing over products once they get in-house. Some of these are more exploratory than others, but ultimately that’s our hope."

Anthony Denier, CEO Of Webull

Unlike his counterparts, Denier is heading up an upstart in the retail brokerage industry. The average age of a Webull user is just 27, and the average account size is less than $3,000.

As a result, Denier says the company has placed a big emphasis on being nimble and able to quickly respond to customers needs.

“We are a tech company first, brokerage second. We’re so fast and young, that we’re able to change our product according to what customers guide us. What that allows is for us to maximize the use of technology to keep our costs extremely low because our margins are razor thin at this point.”

That nimbleness has enabled Webull to attract small accounts. And Denier expressed curiosity as to how those accounts could transition to larger firms that may not necessarily have the resources to support those types of clients.

“When we saw a lot of the big firms go to zero commissions," he said, "the one thing that came up is, are they going to be ready for that $50 account? And they’re going to get a lot of them.”

Related Links:

Here Are The Winners Of The 2019 Benzinga Global Fintech Awards

Fintech Leaders Talk The Future Of Payments, Establishing Customer Trust