This is the herd mentality in the online brokerage industry.
Just hours after Charles Schwab announced the abolition of commissions on US equities, exchange-traded funds and options, competitor TD Ameritrade did the same.
] "It's fantastic, I hope Fidelity announces it soon," says Noah Hamman, CEO of AdvisorShares.
Hamman's firm offers customers 16 products and has assets of $ 700 million.
"I hope you keep that." "Hamman tells Yahoo Finance that platforms are open to smaller businesses," offering investors more choice. However, I am looking forward to the news and think that this is a great opportunity for us and for investors.
But will zero commissions be a bullish trigger for the market as they may encourage more people to trade in stocks? Sure, that's Hamman.
"People can act much faster with a snap of the finger or a swipe on the screen, and sometimes it can make you make decisions that you do not really want to make and emotionally react to," he says.
No wonder Hamman believes in managed products and chooses the right money manager to try to help investors make their trading decisions more emotional.
Changing the Business Model
Experts Say Relocation of commissions to zero by more major industry players means a major shift in the business model for many of these low-cost brokerage firms.
"When consultants and individual investors can now carry out their realignment and monthly allocation in products like" Ours, "Hamman says," and reduce some of that friction in commission costs ̵
The price competition among online brokers has been sparked by the increase in low-cost passive assets and investments in apps such as "Ro binhood, which has been providing commission-free business since 2013."
Peter Crawford, Chief Financial Officer of Schwab, said in a statement : "We see new companies trying to enter our market – with zero or low capital commissions as leverage – it seemed inevitable that commissions would go to zero, so why wait?"
Shares of online brokers became collapsed for a second day, including Charles Schwab (SCHW), E * Trade Financial (ETFC) and Interactive Brokers Group (IBKR) .TT Ameritrade (AMTD) was the biggest success, slipping 26% on Tuesday for another 3 %.
Alexis Christoforous is co-anchored by Yahoo Finance's "The First Trade." Follow it r on Twitter @ AlexisTVNews.