 |
|
Securities Brokers Industry Profile Excerpt
| SIC Codes: 6211 NAICS Codes: 52312 Page Length: 10-12 Last Quarterly Update: 5/19/2008 View Sample Industry Profile |
 |
The securities brokerage industry in the US includes fewer than 4,000 companies, with combined annual revenue over $100 billion. Large companies include Merrill Lynch, Charles Schwab, AG Edwards, and the brokerage units of large financial services companies like Citigroup and Fidelity. A typical brokerage office has annual revenue of $5 million. The industry is highly concentrated: the top 50 companies hold over 80 percent of the market.
COMPETITIVE LANDSCAPE
Demand is driven by the returns of securities markets relative to alternative investments. The profitability of individual companies depends on efficient operations and good marketing. Large companies have economies of scale in operations and high name recognition. Small companies can compete effectively by offering better customer service. The industry is highly automated: average annual revenue per worker is close to $300,000.
The traditional brokerage industry that sold stocks to individual investors has largely evolved into companies that either broker large stock trades for institutional investors or sell a variety of investment products to individuals. Instead of buying individual securities, many individuals now invest in mutual funds.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major services are stock brokerage, investment advice, brokerage of bonds and derivatives, and the brokerage of mutual funds. Stock brokerage accounts for about 50 percent of industry revenue, investment advice for 15 percent, and brokerage of debt securities for 15 percent.
Brokerage includes helping individuals and institutions buy and sell securities, without taking an ownership position in the securities. Brokers accomplish this ...
Would you or your company benefit from having unlimited access to First Research’s industry intelligence tools? Click Here to find out more about Subscription options.