Because of the free market system established as the economic backbone of the U.S. economy, different trading companies have different trade commission fees and a wise consumer can take advantage of the discrepancies. Within the past few years, online trading businesses that allow consumers to act as their own stockbrokers have been sprouting up all over the Web. All of the online trading companies are competing for new business so they try to lure in new customers in several ways. One way they can set themselves apart from each other is by offering you different trade commission fees in hopes of enticing you to choose them over their nearest competitor.
Another reason trading companies have different trade commission fees is their overall operating expenses. Typically, online trading companies can offer lower trade commission fees than their brick and mortar cousins as they have lower operating costs. If you opt to manage your own finances via online trading, there is no fund manager responsible for your account to assist you or to take a commission from your earnings.
Brick and Mortar Brokers
Brick and mortar trading companies have different trade commission fees from each other not only to lure in new customer business, but because the skill set of their employees. Most brokerage firms reward their employees handsomely for a job well done with large salaries and high bonuses. The funds for paying for the traders must come from somewhere, and trade commission fees are just one revenue source that management can put on the books.
By taking the time to honestly evaluate your financial acumen and your comfort level, you can decide whether you want to invest solely via online trading or by utilizing the professional experience a portfolio manager brings to the table. Once that basic decision is made, you can then research your path and benefit from the different commission fees trading companies offer.