$5 million buy and hold can be very profitable on the short stock rebate side. The reality is you make very little money trading. Interest rate spreads, short stock rebate, margin interest and asset management fees are becoming the major revenue sources. Maker/taker and PFOF go away - which appears to be the trend - and small active accounts are going to have a difficult time finding a home or the cost of trading will trend higher.
Holy smokes - Fidelity has lowered their commissions to $4.95 !! And they don't charge data fees for the exchanges. The down side is they do not offer DMA - so routing the orders to the IEX is not a choice although they claim to have the best price improvements. Now I can also trade my stupid 401K without feeling as violated.
One thing to note - I am now trading the larger ETFS in my Fidelity 401K for free - the only catch is if I sell before 30 days I pay $4.95 to liquidate - how cool is that? Never thought I would be bragging about using Fidelity. People trading in this era have no idea how lucky they are - I payed approx $28 RT back in the day. (still have other accounts for futures trades)
The vast majority of brokerage firm customers are investors not traders. Most investors do not use margin so they don't care about high margin rates. 1000 shares costs $5.00 fixed rate at IB. Any investor buying/selling 1000 shares or more does better at an all you can eat broker for $4.95. IB caters to traders, but they do have more active investors that do use IB's low margin rates. For equities, on a straight commission basis IB no longer has a clear price edge. IB has never had a clear price edge on futures commissions, yet they still do a healthy and very profitable futures business.
IB's pseudo-unified futures/securites offering is a big success. Traders appreciate the convenience. Some may not even realize it's actually two accounts.
My Fidelity IRA was all Fidelity mutual funds when I first opened it (before I knew better). I've been gradually shifting my positions to commission-free iShares ETFs every re-balance since the expense ratios are so much lower. I agree Fidelity looks better and better over time.
What a stupid comment. Have you not learnt by now that there is "no such thing as a free lunch" in the finance industry ? Or are you one of those people who believes those holiday money companies offering you "commission-free" rates at the airport are actually giving you the best deal ever ? The $5m accounts won't be trading free ! Either (a) they'll be on a temporary promotional rate of some description or (b) they will be paying some sort of other account management charges. And if its neither (a) or (b) then they are probably not getting the best prices on their trades or some other "hidden charges". The broker won't be giving anything for free, so whether explicit or hidden, you'll be paying for your trades !