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).
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: the top eight companies account for 50% of industry revenue. Indeed, five firms (ranked by customers and assets) -- TD Ameritrade, E*Trade, Fidelity Investments, Charles Schwab, and Scottrade -- dominate the business in the US.
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 trust services.