Online Stock Brokerages in the US - Market Research Report (2013-2028)
New York, United States
Last Updated: September 2023
NAICS OD4755Revenue
$10.7bn
Past 5-Year Growth
Profit
$X.Xbn
Employees
15,976
Businesses
230
Wages
$X.Xbn
Online Stock Brokerages in the US industry analysis
Online Stock Brokerages are expected to grow through the end of 2023. Revenue is expected to inch upward at a CAGR of 0.3% to an estimated $10.7 billion through the end of 2023, including an estimated 5.1% growth in 2023. Online brokers gained customers at an accelerating pace during the same period as more investors left their brokers and started trading online. Despite the recession, brokers endured revenue growth as more investors made trades amid market volatility. In 2020, due to the spread of COVID-19, people stayed indoors to avoid contracting the virus. This led to a collapse in spending on travel and other discretionary items, which caused a spike in the personal savings rate and led to a rise in young investors through online brokerages. With the sudden spike in new trading accounts, total trading volume and internet traffic skyrocketed, which bolstered demand for online brokerage services and helped stabilize revenue, as exemplified in 2020 when revenue grew 8.2%. However, larger growth was offset by high inflation, which cut consumers' propensity to invest. In 2023, profit, measured as earnings before interest and taxes, is expected to account for 11.6% of revenue.While online brokerage services were growing, players sought to expand their offerings to gain new customers and sway existing traders from other firms. In doing so, firms ramped up merger and acquisition (M&A) activity to offer advanced trading platforms and the ability to trade a diversified list of securities. One of the major acquisitions in the current period was Charles Schwab Corporation acquiring TD Ameritrade. Companies also engaged in heavy price competition to acquire new customers.Revenue is expected to continue growing over the next five years, as the expected stabilization of global economic conditions will dampen market volatility. The economic recovery will allow consumers greater flexibility in online trading while the stock market grows in value and uncertain conditions wane. Brokerages will continue to innovate their platforms and engage in price competition to gain and retain customers. At the same time, expected growth in internet traffic volume and the S&P 500 will serve as good indicators for demand for online brokerage. Over the next five years, revenue is forecast to grow at a CAGR of 3.8% to an estimated $12.9 billion.
Trends and Insights
- Robust demand during COVID-19 offsets broader market volatility. Consumers' heightened propensity to invest during the pandemic exacerbated demand for online stock brokerages while boosting core revenue channels.
- Broad popularity and access of equity securities creates consistent revenue stream. Since investors look for the largest rate of return for their capital, they will turn to name-brand equity securities when investing via online brokerages.
- Robust population presence incentivizes establishment growth. Regions that house a significant percentage of the domestic population provide the largest potential customer base for online stock brokerages.
- Creating a competitive commission structure enhances internal competition. Companies that are able to lower commission costs incentivize investors to open accounts within their company, which heightens their competitive advantage.
Industry Overview
Market size and recent performance (2013-2028)
Industry revenue has grown at a CAGR of 0.3 % over the past five years, to reach an estimated $10.7bn in 2023.
Trends and Insights
Surge in volatility amid COVID-19 heightens interest in online stock brokerages
- Online stock brokerages have benefited from a surge in online account opening over the past five years, as a diverse array of investors looked to take advantage of economic volatility.
- Additional trends and insights available with purchase
Source: IBISWorld
Industry outlook (2024-2029)
Market size is projected to grow over the next five years.
Trends and Insights
Recovery of global economic conditions poised to accelerate investor appetite
- As economic conditions stabilize following COVID-19 and global markets recover, investor confidence is set to rise in the coming years, creating a unique opportunity for online stock brokerages.
Biggest companies in the Online Stock Brokerages in the US
| Company | Market Share (%)
2023 | Revenue ($m)
2023 | Profit ($m)
2023 | Profit Margin (%)
2023 |
|---|---|---|---|---|
E Trade Financial Corp | 2,945.9 | 1,368.0 | 46.4 | |
Robinhood Markets, Inc. | 2,024.9 | 623.0 | 30.8 | |
Charles Schwab Corp | 1,782.3 | 589.3 | 33.1 |
To view the market share and analysis for all 3 top companies in this industry, view purchase options.
Products & Services Segmentation
Source: IBISWorld
Industry revenue is measured across several distinct product and services lines, including Debt securities, Equity securities and Derivative contracts. Debt securities is the largest segment of the Online Stock Brokerages in the US.
Trends and Insights
Strong performance of equity markets strengthens revenue via equity securities
- This product segment generates revenue from commissions and transaction fees generated from the sales of equity securities.
- More insights available in the full report
Widen you competitive advantage with related industries
Competitors
- There are no industries to display.
Complementors
- There are no industries to display.
International industries
- Global Investment Banking & Brokerage
- Financial Asset Broking Services in New Zealand
- Security & Commodity Contracts Brokerage in the UK
- Securities Brokerage and Transaction Services in China
Table of Contents
About this industry
Industry definition
Online stock brokerages operate online websites that act as agents in the buying and selling of stocks or other securities. Brokers primarily concentrate on stock brokerage while also offering services for other types of securities.
What's included in this industry?
Equity Securities Debt Securities Derivative ContractsForex Investments Educational tools, tutorials and adviser feesCompanies
E Trade Financial CorpRobinhood Markets, Inc.Charles Schwab CorpPurchase this report to view all 3 major companies in this industry.
Related Terms
SECURITIESTRADERSCOMMISSIONIndustry Code
NAICS 52231 - Online Stock Brokerages in the US
Performance
Get an indication of the industry's health through historical, current and forward-looking trends in the performance indicators that make or break businesses.
Analyst insights
Robust demand during COVID-19 offsets broader market volatility. Consumers' heightened propensity to invest during the pandemic exacerbated demand for online stock brokerages...
In this chapter (4)
- Current Performance
- Outlook
- Volatility
- Life Cycle
Key metrics
- Annual Revenue, Recent Growth, Forecast, Revenue Volatility
- Number of Employees, Recent Growth, Forecast, Employees per Business, Revenue per Employee
- Number of Businesses, Recent Growth, Forecast, Employees per Business, Revenue per Business
- Total Profit, Profit Margin, Profit per Business
Charts
- Revenue, including historical (2013-2022) and forecast (2023-2028)
- Employees, including historical (2013-2022) and forecast (2023-2028)
- Businesses, including historical (2013-2022) and forecast (2023-2028)
- Profit, including historical (2013-2023)
- Industry Volatility vs. Revenue Growth
- Industry Life Cycle
Detailed analysis
- Trends in supply, demand and current events that are driving current industry performance
- Expected trends, economic factors and ongoing events that drive the industry's outlook
- Key success factors for businesses to overcome volatility
- How contribution to GDP, industry saturation, innovation, consolidation, and technology and systems influence the industry's life cycle phase.
Products and Markets
Learn about an industry's products and services, markets and trends in international trade.
Analyst insight
Broad popularity and access of equity securities creates consistent revenue stream. Since investors look for the largest rate of return for their capital, they will turn to n...
In this chapter
- Products & Services
- Major Markets
Key metrics
- Largest market segment and value in 2023
- Product innovation level
Charts
- Products & services segmentation in 2023
- Major market segmentation in 2023
Detailed analysis
- Trends impacting the recent performance of the industry's various segments
- Innovations in the industry's product or service offering, specialization or delivery method
- Key factors that successful businesses consider in their offerings
- Buying segments and key trends influencing demand for industry products and services
Geographic Breakdown
Discover where business activity is most concentrated in an industry and the factors driving these trends to find opportunities and conduct regional benchmarking.
Analyst insights
Robust population presence incentivizes establishment growth. Regions that house a significant percentage of the domestic population provide the largest potential customer ba...
In this chapter (1)
- Business Locations
Charts
- Share of revenue, establishment, wages and employment in each state
- Share of population compared to establishments in each region in 2023
Tables
- Number and share of establishments in each state in 2023
- Number and share of revenue each state accounts for in 2023
- Number and share of wages each state accounts for in 2023
- Number and share of employees in each state in 2023
Detailed analysis
- Geographic spread of the industry across North America, and trends associated with changes in the business landscape
- Key success factors for businesses to use location to their advantage
Competitive Forces
Get data and insights on what's driving competition in an industry and the challenges industry operators and new entrants may face, with analysis built around Porter's Five Forces framework.
Analyst insights
Creating a competitive commission structure enhances internal competition. Companies that are able to lower commission costs incentivize investors to open accounts within the...
In this chapter (4)
- Concentration
- Barriers to Entry
- Substitutes
- Buyer & Supplier Analysis
Key metrics
- Industry concentration level
- Industry competition level and trend
- Barriers to entry level and trend
- Substitutes level and trend
- Buyer power level and trend
- Supplier power level and trend
Charts
- Market share concentration among the top 4 suppliers from 2018-2023
- Supply chain including upstream supplying industries and downstream buying industries, flow chart
Detailed analysis
- Factors impacting the industry’s level of concentration, such as business distribution, new entrants, or merger and acquisition activity.
- Key success factors for businesses to manage the competitive environment of the industry.
- Challenges that potential industry entrants face such as legal, start-up costs, differentiation, labor/capital intensity and capital expenses.
- Key success factors for potential entrants to overcome barriers to entry.
- Competitive threats from potential substitutes for the industry’s own products and services.
- Key success factors for how successful businesses can compete with substitutes.
- Advantages that buyers have to keep favorable purchasing conditions.
- Advantages that suppliers have to maintain favorable selling conditions.
- Key success factors for how businesses can navigate buyer and supplier power.
Companies
Learn about the performance of the top companies in the industry.
Analyst insights
Three companies own more than a 5.0% share of the market. The prevalence of existing relationships with core clients, coupled with robust marketing power from companies such ...
In this chapter
- Market Share Concentration
- Companies
- Company Spotlights
Charts
- Industry market share by company in 2019 through 2023
- Major companies in the industry, including market share, revenue, profit and profit margin in 2023
- Overview of E Trade Financial Corp's performance by revenue, market share and profit margin from 2017 through 2023
- Overview of Robinhood Markets, Inc.'s performance by revenue, market share and profit margin from 2017 through 2023
- Overview of Charles Schwab Corp's performance by revenue, market share and profit margin from 2017 through 2023
Detailed analysis
- Description and key data for E Trade Financial Corp, and factors influencing its performance in the industry
- Description and key data for Robinhood Markets, Inc., and factors influencing its performance in the industry
- Description and key data for Charles Schwab Corp, and factors influencing its performance in the industry
External Environment
Understand the demographic, economic and regulatory factors that shape how businesses in an industry perform.
Analyst insights
Sharp spike in internet traffic volume will bolster demand for online stock brokers. As internet traffic volume heightens, it broadens the potential market for online investo...
In this chapter
- External Drivers
- Regulation & Policy
- Assistance
Key metrics
- Regulation & policy level and trend
- Assistance level and trend
Charts
- Regulation & Policy historical data and forecast (2013-2028)
- Assistance historical data and forecast (2013-2028)
Detailed analysis
- Demographic and macroeconomic factors influencing the industry, including Regulation & Policy and Assistance
- Major types of regulations, regulatory bodies, industry standards or specific regulations impacting requirements for industry operators
- Key governmental and non-governmental groups or policies that may provide some relief for industry operators.
Financial Benchmarks
View average costs for industry operators and compare financial data against an industry's financial benchmarks over time.
Analyst insights
Strong shift toward the digital space strengthens profitability. As more clients shift their investment platform toward online brokers, it enhances the broader profit margin ...
In this chapter
- Cost Structure
- Financial Ratios
- Key Ratios
Key metrics
- Profit margin, and how it compares to the sector-wide margin
- Average wages, and how it compares to the sector-wide average wage
- Largest cost component as a percentage of revenue
- Industry average ratios for days' receivables, industry coverage and debt-to-net-worth ratio
Charts
- Average industry operating costs as a share of revenue, including purchases, wages, depreciation, utilities, rent, other costs and profit in 2023
- Average sector operating costs as a share of revenue, including purchases, wages, depreciation, utilities, rent, other costs and profit in 2023
- Investment vs. share of economy
Data tables
- Industry Multiples (2016-2021)
- Industry Tax Structure (2016-2021)
- Income Statement (2016-2021)
- Balance Sheet (2016-2021)
- Liquidity Ratios (2016-2021)
- Coverage Ratios (2016-2021)
- Leverage Ratios (2016-2021)
- Operating Ratios (2016-2021)
- Cash Flow & Debt Service Ratios (2013-2028)
- Revenue per Employee (2013-2028)
- Revenue per Enterprise (2013-2028)
- Employees per Establishment (2013-2028)
- Employees per Enterprise (2013-2028)
- Average Wage (2013-2028)
- Wages/Revenue (2013-2028)
- Establishments per Enterprise (2013-2028)
- IVA/Revenue (2013-2028)
- Imports/Demand (2013-2028)
- Exports/Revenue (2013-2028)
Detailed analysis
- Trends in the cost component for industry operators and their impact on industry costs and profitability
Key Statistics
Industry Data
Data Tables
Including values and annual change:
- Revenue (2013-2028)
- IVA (2013-2028)
- Establishments (2013-2028)
- Enterprises (2013-2028)
- Employment (2013-2028)
- Exports (2013-2028)
- Imports (2013-2028)
- Wages (2013-2028)
Methodology
How are IBISWorld reports created?
IBISWorld has been a leading provider of trusted industry research for over 50 years to the most successful companies worldwide. With offices in Australia, the United States, the United Kingdom, Germany and China, we are proud to have local teams of analysts that conduct research, data analysis and forecasting to produce data-driven industry reports.
Our analysts start with official, verified and publicly available sources of data to build the most accurate picture of each industry. Analysts then leverage their expertise and knowledge of the local markets to synthesize trends into digestible content for IBISWorld readers. Finally, each report is reviewed by one of IBISWorld’s editors, who provide quality assurance to ensure accuracy and readability.
IBISWorld relies on human-verified data and human-written analysis to compile each standard industry report. We do not use generative AI tools to write insights, although members can choose to leverage AI-based tools within the platform to generate additional analysis formats.
What data sources do IBISWorld analysts use?
Each industry report incorporates data and research from government databases, industry-specific sources, industry contacts, and our own proprietary database of statistics and analysis to provide balanced, independent and accurate insights.
Key data sources in the US include:
- US Census Bureau
- US Bureau of Labor Statistics
- US International Trade Commission
Analysts also use industry specific sources to complement catch-all sources, although their perspective may focus on a particular organization or representative body, rather than a clear overview of all industry operations. However, when balanced against other perspectives, industry-specific sources provide insights into industry trends.
These sources include:
- Industry and trade associations
- Industry federations or regulators
- Major industry players annual or quarterly filings
Finally, IBISWorld’s global data scientists maintain a proprietary database of macroeconomic and demand drivers, which our analysts use to help inform industry data and trends. They also maintain a database of statistics and analysis on thousands of industries, which has been built over our more than 50-year history and offers comprehensive insights into long-term trends.
How does IBISWorld forecast its data?
IBISWorld’s analysts and data scientists use the sources above to create forecasts for our proprietary datasets and industry statistics. Depending on the dataset, they may use regression analysis, multivariate analysis, time-series analysis or exponential smoothing techniques to project future data for the industry or driver. Additionally, analysts will leverage their local knowledge of industry operating and regulatory conditions to impart their best judgment on the forecast model.
IBISWorld prides itself on being a trusted, independent source of data, with over 50 years of experience building and maintaining rich datasets and forecasting tools. We are proud to be the keystone source of industry information for thousands of companies across the world.
Learn more about our methodology and data sourcing on the Help Center.
Frequently Asked Questions
Unlock comprehensive answers and precise data upon purchase. View purchase options.
What is the market size of the Online Stock Brokerages in the US industry in United States in 2024?
The market size of the Online Stock Brokerages in the US industry in United States is $10.7bn in 2024.
How many businesses are there in the Online Stock Brokerages in the US industry in 2023?
There are 230 businesses in the Online Stock Brokerages in the US industry in United States, which has declined at a CAGR of 0.8 % between 2018 and 2023.
Has the Online Stock Brokerages in the US industry in United States grown or declined over the past 5 years?
The market size of the Online Stock Brokerages in the US industry in United States has been growing at a CAGR of 0.3 % between 2018 and 2023.
What is the forecast growth of the Online Stock Brokerages in the US industry in United States over the next 5 years?
Over the next five years, the Online Stock Brokerages in the US industry in United States is expected to grow.
What are the biggest companies in the Online Stock Brokerages in the US market in United States?
The biggest companies operating in the Online Stock Brokerages market in United States are E Trade Financial Corp, Robinhood Markets, Inc. and Charles Schwab Corp
What does the Online Stock Brokerages in the US in United States include?
Equity Securities and Debt Securities are part of the Online Stock Brokerages in the US industry.
Which companies have the highest market share in the Online Stock Brokerages in the US in United States?
The company holding the most market share in United States is E Trade Financial Corp.
How competitive is the Online Stock Brokerages in the US industry in United States?
The level of competition is high and increasing in the Online Stock Brokerages in the US industry in United States.
