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where do brokerages make money when you move secutities over ?
Old 08-21-2017, 09:13 AM   #1
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where do brokerages make money when you move secutities over ?

what is in it for the brokerage when they offer cash promo's and you move etf's or existing stocks over .

i can see if you use their services or buy their products but if not what is in it for them ? after all they are insuring the securities too .

i can see owning funds through them too , but stocks and etf's have me wondering what they get out of it from your account

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Old 08-21-2017, 10:00 AM   #2
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There are various ways brokerages can lend, short, etc. your securities and make money on them, even if you never make trades.

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Old 08-21-2017, 10:48 AM   #3
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Even though the float isn't worth much today they are experts at making it go further.

One of the funniest tasks I was ever asked to do was analyze the performance of a machine running our application with a cash management system(used to determine how much money didn't have to be deposited) that only used discretionary cycles. It was using most of the machine, starving our app for cycles. At my VPs direction I made it use only discretionary cycles.

The next morning there's a VP from the cash management side wanting to know why I did that. My actions cost his business 150K! Explained why and at who direction, by the time I got to my VPs office the other VP had him on the phone!

I never saw a major hardware purchase get approved so quickly..
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Old 08-21-2017, 02:22 PM   #4
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Conventional mutual funds pay brokers to do account servicing, too. Vanguard pays Schwab a fee because I hold a couple of Vanguard funds there.

Brokerage firms also believe as a matter of faith that it is better to have a customer's money than for a competing house to have it. Which in large part is true, I think.
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