how does a brokerage firm make money 
generally brokerages make money by charging various fees and commissions on transactions they facilitate and services they provide the online broker who offers free stock trades receives fees for other services plus fees from the exchanges full service brokerages increasingly charge a so called wrap fee an all in one charge for all or most services this is usually 1 to 3 of the amount in the client s account per year and covers advisory services and investment research as well as trading fees 