Online Brokerages: Trends and Developments

February 5, 2009
Industry Trends
North America


New York, NY, USA February 6, 2009

The world of online investment brokerages continues to adapt. As poor markets and declining numbers of advisors push investors toward a self-service environment, online brokerages are positioning themselves to take advantage of future growth.

In a new report, Online Brokerages: Trends and Developments, Celent looks at developments in the industry since 2005 in terms of clients, products, and revenue models. Celent notes that firms continue to enter the industry as stand-alone firms and gain clients, while firms using the advisor-centric model tied to full service brokerages and banks continue to lose ground in terms of capabilities that are attractive to online clients.

The rise of social networking has resulted in many newly-incorporated features for online platforms. Other drivers in the enhanced outlook for online brokerages include the accelerated growth of investment self-service, both despite and as a result of the massive market declines of 2008, which may be the harbinger of even more rapid growth over the next few years for online brokerage firms.

"Online firms have many more options for earning revenue today," says Robert J. Ellis, Senior Vice President of Celent’s Wealth Management practice and co-author of the report. "Combined with the rise of options trading and the battle for active traders, today’s online brokerage world is more exciting and client-friendly than ever before."

This report begins with an overview of the size and scope of the online brokerage world. The report then develops a current overview of the industry in terms of the number of users, assets and frequency of trading. It also looks at product trends in the online world among different client and firm segments.

The report provides a detailed evaluation of many of the online brokerage firms; including Lightspeed, TradeStation, thinkorswim, optionsXpress, Interactive Brokers, Trade King, Schwab, E*Trade, and TD Ameritrade, as well as other stand-alone online brokerages and asset management firms. These firms are compared and contrasted to the advisor-centric online models of banks and full-service brokerages.

The second report in this series, Online Brokerage: Client Experiences and Technology, will emphasize the changing role of the brokerage/client online interface.

This 78-page report contains 11 figures and 25 tables. A table of contents is available online.

Members of Celent's Wealth Management research service can download the report electronically by clicking on the icon to the left.  Non-members should contact for more information.  

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
Tel: +1 212 345 1366

Europe (London)
Chris Williams
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
Tel.: +81 3 3500 3023

Table of Contents

New York, NY, USA February 6, 2009


Executive Summary 3
Introduction to Online Brokerage 5
Online Brokerage History and Taxonomy 5
Online Brokerage Trading and Asset Trends 6
Online Brokerage Product Trends 15
Online Brokerage Revenue model Trends 6
Online Brokerage Vendor Profiles 15
Conclusions 26


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