5 Billion A Year: What Broker Discounts Cost Investors

We spotted this today:

“In recent years, though, brokers have had another enticement that can pull them in a different direction: payments from stock exchanges in return for sending them business.
The practice has attracted criticism from several industry participants and former regulators who say the so-called rebates that the exchanges pay Wall Street firms could give those firms an incentive to profit at the expense of investors. Now a new study using industry data says that the rebates could be costing mutual funds, pension funds and ordinary investors as much as $5 billion a year”

Statistics Source: NYTimes

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