US Brokers Start Price War

Stephen Harris

13 October 2006

Bank of America has joined a US stock-dealing price war by offering free stock trades to clients who have $25,000 in a checking, savings or money market account at the bank. Earlier this week, California-based newcomer Zecco.com offered free trades to anyone with a $2,500 account. The move is seen as an attack on the established on-line brokers who stole the market during the dotcom boom. Now brokers such as E-Trade and Ameritrade could be pressured to come up with their own free-trade offers, according to analysts. But, as a further sign that financial services globally is becoming more about service than product, Charles Schwab founder and chief executive of the eponymous broker said in a statement: “Customers evaluate things other than commissions, such as service, rates of return on cash balances and access to investment advice. Knowing there is no free lunch, consumers look carefully at the whole picture."