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Comment by 4ndrewl

3 days ago

How do they make money from you as a customer?

Quite a lot of customers either have cash sitting in the account which they make interest on, or have margin debt which they charge for.

You can Google it, but AUM at scale means .03% is a significant amount of money. There's also uninvested cash that the broker can invest in t-bills and take the spread.

  • Thanks for the lmgtfy :)

    I bet the uninvested cash product drives some weird incentives - kpis around increasing ratio of sells to buys and increasing pain around removing cash.