Securities Brokerages Industry Overview

Excerpt from Securities Brokerages Report

Companies in this industry broker deals for buyers and sellers of securities. Major companies include Charles Schwab, Edward Jones, and brokerage units of Citigroup, Goldman Sachs, and Morgan Stanley (all based in the US), as well as Credit Suisse (Switzerland), Deutsche Bank (Germany), Macquarie Group (Australia), and Nomura (Japan).

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 industry is highly concentrated: the top 50 companies account for more than 80 percent of revenue.

Products, Operations & Technology

Major services are stock brokerage, investment advice, brokerage of bonds and derivatives, and the brokerage of mutual funds. Financial planning services account for a third of industry revenue, stock brokerage for a quarter, and financing for about 10 percent. The remaining revenue is comprised of income from brokerage of investment securities, derivatives, and other fees.