12.04.19
Yes, You Can Get Free Trading. But There's Often a Catch.
by: Tara Siegel Bernard
Many investment companies, in stamping out certain fees, are doing other things that can cost investors money. Over the past decade, online brokerages and wealth management firms have started to make more money off customer cash by sweeping it into lower-yielding deposit accounts instead of higher-yielding money market funds. Even with a commission-free trading structure, "there are other revenue levers behind the scenes that brokers can pull,” said Greg McBride, chief financial analyst at Bankrate.com. For example, brokers receive payments from technologically savvy wholesale brokerages that buy the right to execute retail trades.
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