Online brokerages are being hit hard by current market downturns, MarketWatch reports. According to MarketWatch, E*Trade has seen a 5% drop in total client assets between April and May – resulting in a 6% loss in share price, while Charles Schwab saw a 2% decline in assets. Says Chris Dodds, CFO at Schwab, in a MarketWatch interview, the drop-off is “purely a function of market conditions.” Schwab also announced it was reducing some charges for its services, which may force competitors to reluctantly do the same – and cause a decline in industry revenue. “The market has reacted quite negatively to past cuts, so this development combined with falling U.S. equity markets will likely mean more pain for online e-brokerage stocks,” analyst David Trone of Fox-Pitt Kelton wrote in a research report.
