Disrupting Wall Street’s Way of Life
Three decades after San Francisco-based Charles Schwab led an investor revolt against mainstream stock brokerages, an Internet start-up a few miles to the south is redefining the meaning of a discount brokerage. The Burlingame online brokerage’s stock trades are free - hence the name Zecco, an amalgam of letters derived from “zero commission costs.” Giving away free trades - which Goliaths Bank America and Wells Fargo soon matched - isn’t what poses the biggest long-term threat to the established players on Wall Street, analysts say. Some predict it’s just a matter of time before free commissions are widespread.In an attempt to capitalize on the younger generation’s comfort with online social networks, Zecco and a low-commission competitor called TradeKing are fostering virtual “communities” where investors can trade stock tips, boast about their trading prowess and conduct their trades in public view for everyone to analyze.
The Internet has reshaped the brokerage industry by making it less expensive to execute trades and adminis ter accounts. But some analysts think online social networks like Zecco’s could empower do-it-yourself investors and fundamentally disrupt Wall Street’s broker-driven way of life.
July 16th, 2007 at 1:23 pm
This is exactly what I expected to find out after reading the title s Way of Life. Thanks for informative article