BrokerageAmerica Says Its No-Frills Trading Saves Money For InvestorsBrokerageAmerica Says Its No-Frills Trading Saves Money For Investors

BrokerageAmerica Says Its No-Frills Trading Saves Money For Investors

Cut the fat and pass on the savings. BrokerageAmerica.com, a new online brokerage firm for retail investors, Monday outlined its strategy to become a no-frills, no-fees option for online trading by providing rebates on every equity transaction. It also will offer commission-free trading for all U.S. market orders.

BrokerageAmerica plans to save money for its investors by giving them direct access to the market. Retail investors will work directly with the market-makers who handle stocks in online trades and bypass the broker who traditionally serves as the middleman in these transactions. The cost savings is then passed on to the investor in the form of a rebate. Traders will get a rebate of one-tenth of a cent for each share on all transactions; the rebate can go into an online account for future trading or be received in cash. For limit orders, the charge will be $5.

The deal isn't right for everyone, however. BrokerageAmerica is targeting self-directed online investors who execute five trades per month. The firm says that under its plan, those traders will save between $500 and $900 annually, factoring in the commission savings and rebates.

The new firm is composed of some heavy hitters on Wall Street, including CEO Drew Sycoff, who is the founder of Andrew Garrett Inc., and chief operating officer and president Don Camillo, who once managed the electronic retail brokerage business at Credit Suisse First Boston and previously managed trading operations at E-Trade.

Cutting the frills will also help investors save money. BrokerageAmerica won't have any of the fancy extras such as equity research, though it will offer online account information services, standard market data, and various equity order types.