Slightly off topic for me, but this is a significant move my Bank of America.  They led the way in the US with free online banking (hard to imagine anyone actually charged for it!), and this precedent setting move probably forestalls the end of banking affiliated brokerages.

Matt Hougan (IndexUniverse.com) submits: In a move with huge ramifications for the exchange-traded fund [ETF] industry, Bank of America (BAC) is eliminating brokerage-trading fees for customers with $25,000 or more in assets. The free trades will roll out in selected markets like New York and Boston this month, and across the nation by February 2007. Accounts will be allowed 30 free trades a month.

Source: Why Bank of America’s New Free Trading Will Change the Industry While Benefiting ETFs – SeekingAlpha

Online brokerage is generally akin to bill payment.  That’s my take on the topic – sure there are the small group of dedicated online investors who sit with their finger on the refresh button, making hundreds of trades annually, but the mass market is comprise of the same conservative group that has Bank accounts and mortgages.  For them they want advice, assistance, and the ability to buy and sell periodically when the time is right.

GenY’rs fit this mould perfectly.  Many will have a full service Investment Advisor too, but keep the online brokerage for casual “fun” use.

Relevance to Bankwatch:

Expect to see more follow the Wells/Bank of America model and integrate brokerage with online banking.  Brokerage becomes another tab within the online banking experience.  Also expect polarisation of the uber online brokerages (Schwabb, Etrade) as they offer additional value add services, including banking, and generally begin to look more like the big banks.