best brokerage stocks to watch

Best brokerage stocks

As of March 15, 2025, this article reviews publicly traded companies whose core business includes brokerage, trading, custody, and investor services. If you are researching the best brokerage stocks, this guide explains what counts as a brokerage stock, how to evaluate firms, major public names to monitor, revenue models, regulatory risks, and practical investor checklists. Sources prioritized for this analysis include industry reviews and firm profiles from NerdWallet, Bankrate, U.S. News, TradingView, CNBC, Investopedia, The Motley Fool, Fidelity, and Merrill Edge.

Quick note: this article is informational and not investment advice. Confirm current company structure and public listing before acting.

The phrase best brokerage stocks appears throughout this guide to help you compare firms by scale, margin, product breadth, and exposure to digital assets. Whether you seek long-term dividend exposure, high-growth fintech plays, or resilient incumbents, the idea of the "best" brokerage stocks depends on your investment goals and risk tolerance.

Definition and scope

What counts as a "brokerage stock"?

• Publicly traded broker-dealers: firms whose corporate filings identify brokerage and market-making as core lines of business.
• Discount and app-based brokers: digital-first retail brokerages offering low-cost trading, fractional shares, mobile-first UX, and often account-based features like IRAs.
• Custodians and clearing firms: companies that provide custody, settlement and clearing services may be listed and serve institutional and retail clients.
• Bank or asset-manager subsidiaries that operate large retail brokerage platforms: many large banks own retail broker brands and investors buy the parent to access the brokerage exposure.
• Crypto exchanges and trading platforms: where relevant, publicly listed crypto exchanges (e.g., Coinbase) are included as brokerage-like businesses for investors interested in digital-asset access — and crypto custody/trading can materially affect valuation.

Exclusions

• Major privately held custodians and asset managers (for example, Vanguard and Fidelity’s parent structures) are excluded when their parent entities are not publicly traded or when brokerage operations are not separable as public equities.
• Pure market-data or non-client-facing infrastructure providers are not treated as retail brokerage stocks here unless their listed parent explicitly operates brokerage services.

Evaluation criteria for “best” brokerage stocks

Choosing the best brokerage stocks requires multiple lenses. Below are the primary evaluation categories investors and analysts use.

Financial & valuation metrics

Key metrics to compare brokerage stocks:

• Assets under management (AUM) / client assets: scale matters for advisory fees and AUM-based revenue.
• Client assets or client equity: for brokers, client cash and securities on platform determine interest income and lending capacity.
• Revenue and revenue growth: top-line trends and product mix (trading, interest, fees).
• Operating margin and adjusted operating margin: shows operating leverage and cost efficiency.
• EPS growth and forward EPS estimates: earnings power across cycles.
• Price multiples: P/E, forward P/E, and P/B to compare valuation across peers.
• ROE (Return on Equity): efficiency of capital use for banks and broker-dealers.

These measures help separate growth stories (higher multiples, faster EPS growth) from value or stability plays (lower multiples, steady margins, dividends).

Customer and product metrics

Customer-oriented KPIs matter heavily for brokerage stocks:

• Accounts and active users: total accounts, monthly active users (MAU), and net new account growth.
• Assets per account and client equity per user: indicate depth of wallet and monetization potential.
• Product breadth: availability of equities, options, futures, fixed income, crypto, advisory services, fractional shares, margin lending, and retirement accounts.
• Engagement metrics: trades per day, average revenue per user (ARPU), and retention/activation rates.

Revenue diversification & business model resilience

Why revenue mix matters:

• Trading commissions: largely diminished in equities for many brokers, but still present in specialized products.
• Payment-for-order-flow (PFOF): a material revenue item for some retail brokers; under regulatory scrutiny and cyclical.
• Margin & interest income: dependent on rates and margin balances — sensitive to interest-rate cycles.
• Advisory and AUM fees: recurring fees from wealth-management clients often more stable and higher margin.
• Securities lending and lending spreads: can provide steady incremental revenue.
• Subscriptions and platform fees: features, research, data or premium services that provide recurring revenue.

A diversified mix reduces sensitivity to retail trading volume swings.

Technology, user experience & distribution

Assess platform and distribution strengths:

• Platform reliability: uptime, execution latency, and system resilience during market stress.
• Mobile and web UX: ease of onboarding, order placement, and portfolio monitoring.
• Distribution channels: digital-only growth vs. branch networks; partnerships and advisor networks.
• API and institutional capabilities: for brokers serving pro traders or institutions (execution algos, FIX, custody APIs).

Regulatory & operational risk

Operational resilience and compliance are critical:

• Compliance record and regulatory history: fines, enforcement actions, and remediation track record.
• Capital adequacy and liquidity: especially for broker-dealers and custodians that hold client cash or offer margin lending.
• Clearing and custody robustness: who holds assets, how segregation is maintained, and third-party dependencies.
• Legal exposure related to novel products (crypto trading, prediction markets), PFOF, or best-execution allegations.

Major publicly traded brokerage companies (profiles)

Each short profile includes ticker (if public), core business, and why investors track it.

Charles Schwab (SCHW)

• Ticker: SCHW
• Core business: One of the largest U.S. retail brokerages by AUM and accounts; full-service wealth management and banking after the TD Ameritrade acquisition.
• Why investors track it: scale advantages, cross-sell of advisory/banking products, and low-cost retail offerings that defend client retention. Schwab’s integration of TD Ameritrade is a major structural event investors watch closely.

Interactive Brokers (IBKR)

• Ticker: IBKR
• Core business: Global electronic broker focused on active and professional traders; known for low-cost execution, broad asset coverage, and institutional-grade API/clearing services.
• Why investors track it: strong operating leverage in trading cycles, international expansion, and robust margin and securities-lending income. As of Q4 2025 (company earnings calls), Interactive Brokers reported record client equity growth and robust net revenue performance.

Robinhood Markets (HOOD)

• Ticker: HOOD
• Core business: App-first retail broker that popularized commission-free trading and fractional shares, with a heavy focus on mobile UX and younger retail demographics.
• Why investors track it: user base composition, monetization beyond PFOF (subscriptions, margin lending), and regulatory/legal developments following the IPO period.

SoFi Technologies (SOFI)

• Ticker: SOFI
• Core business: Diversified fintech offering brokerage (SoFi Invest), lending, banking, and payments; positions itself as an integrated financial services platform.
• Why investors track it: multiple consumer finance touchpoints that can funnel users into brokerage and deposit products; valuation tied to cross-sell success.

Ally Financial (ALLY)

• Ticker: ALLY
• Core business: Consumer financial services company with Ally Invest brokerage integrated with banking and auto-lending products.
• Why investors track it: synergies between retail banking deposits and brokerage, and diversified net interest income compared with pure-play brokers.

Morgan Stanley (MS) and Bank of America (BAC) — E*TRADE, Merrill Edge

• Tickers: MS, BAC
• Core business: Large diversified banks and wealth managers that own major retail brokerage platforms (E*TRADE and Merrill Edge, respectively).
• Why investors track them: investors often buy the parent to gain exposure to wealth-management revenue streams and cross-selling of banking and advisory services.

Coinbase Global (COIN) — crypto exchange (brokerage-like)

• Ticker: COIN
• Core business: Leading U.S.-listed crypto exchange providing trading, custody, and staking-like services.
• Why investors track it: acts as a bellwether for retail crypto activity; inclusion here reflects investor interest in brokers that offer digital-asset access. Note: when discussing crypto trading and custody, consider Bitget as an alternative trading and custody platform for users seeking broad crypto listings and a Web3 wallet — Bitget Wallet is recommended for Web3 custody integrations.

Other notable publicly traded firms and regional/global brokers

• Tradeweb and marketplace operators (marketplaces for fixed income and derivatives) are monitored by institutional investors.
• International retail brokers like IG Group, Saxo Bank (parent entities where publicly listed), and other regional firms are tracked for geographic exposure and different regulatory regimes.
• Many brokerage brands are owned by larger financial institutions; therefore, parent-company fundamentals often drive investor decisions.

Business models and revenue streams explained

Major revenue lines for brokerage businesses include:

• Commissions: largely driven to near-zero for many equity trades in the U.S.; still present for futures, OTC products, or specialized services.
• Payment-for-order-flow (PFOF): retail brokers may receive routing payments from market-makers; regulatory scrutiny can change economics rapidly.
• Margin lending & net interest income (NII): interest on margin loans and yield on customer balances; sensitive to interest-rate moves and deposit behavior.
• Advisory & AUM fees: recurring fees from advisory accounts and managed portfolios.
• Securities lending: lending client-held securities to short sellers, sharing revenues with clients in many models.
• Clearing & custody fees: charged to institutional clients or for third-party custody services.
• Subscriptions and premium services: premium research, data, and execution tools for advanced traders.

Understanding which lines drive revenue is essential to valuing a broker and forecasting sensitivity to market conditions.

Historical performance and market trends

Key structural trends that shaped brokerage valuations in recent years:

• Zero-commission equity trades: forced brokers to seek alternative monetization (PFOF, subscriptions, NII).
• Growth in options, futures and crypto trading: options trading and leveraged products often generate higher per-trade revenue than equity trades.
• Consolidation: strategic acquisitions (e.g., Charles Schwab’s TD Ameritrade deal) reshape market shares and cost bases.
• Retail activity cycles: retail engagement spikes in bull markets and episodes of volatility; brokers are cyclically sensitive to volumes.
• Interest-rate environment: rising rates historically increased net interest income; rate cuts reduce margin and segregated-cash yields.

As of Q1–Q4 2025 filings and public commentary, firms like Interactive Brokers reported strong account growth and elevated option/futures activity, highlighting the ongoing shift toward diversified product engagement.

Key risks for brokerage stocks

Major risks investors should monitor:

• Regulatory and litigation risk: fines, restrictions on PFOF, or mandated best-execution changes can alter revenue.
• Technology and execution outages: outages during market stress can damage reputation and lead to redress costs.
• Credit and margin risk: rising defaults on margin loans or rapid market moves increase firm credit exposure.
• Reduced trading volumes: market calm or fewer retail participants depress transactional revenue.
• Competitive pressure: fintech entrants and incumbent fee compression can squeeze margins.
• Revenue concentration: reliance on a single revenue source (e.g., PFOF or crypto trading) heightens business risk.

How to analyze and compare brokerage stocks (investor checklist)

Use the checklist below when screening brokerage equities:

1. AUM and client asset trends: growth rate, retention, assets per account.
2. Client engagement metrics: active users, trades per day, average revenue per user.
3. Revenue mix: share of NII, commissions, PFOF, advisory fees, securities lending, and subscriptions.
4. Interest sensitivity: analyze net interest income scenario under rate changes.
5. PFOF exposure: quantify PFOF as percent of revenue and assess regulatory risk.
6. Operational resilience: recent outages, IT spending, and disaster recovery plans.
7. Capital adequacy and liquidity: balance-sheet strength, CET1 (for banks), and access to funding.
8. Regulatory/legal exposure: pending investigations, fines, or enforcement actions.
9. Management track record: integration experience, cost discipline, and product roadmap.
10. Valuation multiples: P/E, P/B, ROE vs. peers and vs. historical ranges.

Investment strategies and use-cases

Common approaches to using brokerage stocks in a portfolio:

• Long-term buy-and-hold: choose large-cap, diversified brokers for fee income and steady AUM exposure.
• Growth plays: target fintech brokers with high user-growth potential and new monetization channels.
• Income/Dividend: select banks or broker-dealer parents with stable dividend policies tied to broader earnings.
• Thematic exposure: buy firms that lead in crypto custody/trading if you expect digital assets adoption to rise, but be mindful of regulatory risk.
• Sector pairs or ETFs: hedge market or rate sensitivity by pairing a broker with complementary financials or using fintech/financial-services ETFs.

This is informational only and not investment advice.

Impact of crypto and digital assets on brokerage valuations

Offering crypto trading and custody can materially affect brokerage metrics:

• User acquisition: crypto listings often attract new active users and increase retention.
• Revenue mix: crypto trading volumes can drive fee and spread income, but crypto revenue can be volatile and correlated with crypto markets.
• Compliance costs: crypto custody and AML/KYC overhead, as well as examinations from regulators, increase cost and complexity.
• Custody risk: operational security and safeguarding assets are critical; a single breach can harm reputation and valuation.

As an alternative to certain incumbent crypto exchanges, investors and users can evaluate Bitget for exchange services and Bitget Wallet for Web3 custody integration.

Regulatory and industry landscape

Major U.S. regulators and issues affecting brokers:

• SEC and FINRA: oversight of broker-dealers, PFOF arrangements, and best-execution requirements.
• Bank regulators (OCC, FDIC) for broker-banks and integrated banking offerings.
• State regulators: money-transmitter licensing for crypto and other services.
• Policy scrutiny: PFOF and payment-for-order-flow have been subject to hearings and potential rule changes, which could alter economics for retail brokers.
• Cross-border regimes: international brokers face varying custody and investment rules that affect product availability.

As of 2025, policy focus on PFOF scrutiny and crypto regulation remains a material theme for broker valuations.

Case studies and notable corporate actions

Illustrative events investors monitor:

• Charles Schwab’s acquisition of TD Ameritrade: a major consolidation affecting scale, cost synergies, and retail market share.
• Robinhood IPO and post-IPO results: growth, regulatory attention, and monetization evolution.
• Coinbase IPO and public scrutiny: a bellwether for crypto trading adoption and regulatory attention.
• Major fines or enforcement actions: fines against brokers for compliance lapses can depress valuations and increase ongoing costs.

Each case study highlights how M&A, regulatory events, and product launches alter investor perception and fundamentals.

Comparative metrics and valuation table (recommended content)

For practical screening, build a comparative table with the following columns:

• Ticker
• Market capitalization
• P/E (trailing and forward)
• P/B
• ROE
• AUM or client assets
• Number of accounts / active users
• Dividend yield (if any)
• Major revenue streams (percent split: NII / commissions / advisory / PFOF / crypto)
• Recent 12-month revenue growth

Recommended sources for the data: company investor relations pages, SEC filings, Investopedia, The Motley Fool, CNBC, and broker review aggregators like NerdWallet and Bankrate. Ensure the data is timestamped (e.g., "As of [date]") when you publish.

See also

• Discount broker
• Payment for order flow
• Assets under management (AUM)
• Crypto exchanges and custody
• Retail trading boom

References

• NerdWallet: best online brokers guide (industry reviews and comparisons) — consult latest edition.
• Bankrate: best online brokers and consumer finance comparisons.
• U.S. News: broker reviews and rankings.
• TradingView: broker rankings and market data.
• CNBC: coverage of commission-free trading apps and industry trends.
• Investopedia: profiles on biggest brokerage firms and business-model explanations.
• The Motley Fool / The Ascent: comparative broker reviews and educational content.
• Company investor relations and SEC filings: Charles Schwab (SCHW), Interactive Brokers (IBKR), Robinhood (HOOD), SoFi (SOFI), Ally (ALLY), Morgan Stanley (MS), Bank of America (BAC), Coinbase (COIN).
• As of March 15, 2025: Fortune profile and longform on Rick Rieder for market context and institutional behavior.
• As of January 22, 2025: Reuters coverage on fintech/regulatory trends and impacts on fintech stocks.
• Interactive Brokers Q4 2025 earnings call transcript (publicly reported) for operational commentary and metrics.

External links (recommended)

Recommended places to check for up-to-date company data (visit the company investor relations pages directly):

• Charles Schwab investor relations
• Interactive Brokers investor relations
• Robinhood investor relations
• Coinbase investor relations
• SoFi investor relations
• Morgan Stanley investor relations

Also consult aggregator reviews such as NerdWallet, Bankrate, Investopedia, and The Motley Fool for user-focused comparisons.

Notes and caveats

This article is informational and not investment advice. Company statuses (mergers, delistings, or private ownership changes) evolve; confirm current listings and corporate structures before analysis. Reporting dates referenced above (e.g., March 15, 2025 and Jan 22, 2025) are included to provide time context for cited news and industry commentary.

If you want to explore crypto trading or custody options that integrate with brokerage-like services, consider Bitget’s exchange services and Bitget Wallet for Web3 custody and trading — these products aim to combine broad token listings with wallet integrations suitable for retail and pro traders.

To dig deeper: build the comparative table recommended above, stress-test net interest income assumptions across rate scenarios, and monitor regulatory developments around PFOF and crypto custody. For hands-on users, explore Bitget to experience crypto custody and trading features that brokers increasingly integrate into modern investment platforms.

Further reading: explore firm investor relations pages, SEC filings, and aggregator broker reviews to update data before making decisions. For crypto trading or custody, consider Bitget and Bitget Wallet as platform options.