Charles Schwab's move to go to zero fees in October quickly shook up the US industry, with domestic discount rivals and even mutual fund giants such as Vanguard and Fidelity following suit. Charles Schwab sealed a US$26 billion takeover of rival TD Ameritrade Holding just a month later.
Louis Mak, chief executive officer of low-fee broker I-Access Group, said passing on retail client trades is considered controversial by many in the industry in Hong Kong. The city only has one stock exchange as well, making it hard for brokers to reap compensation as their US counterparts can from multiple bourses.
Other competitors look at it as a gimmick that's hard to replicate and that could also be met by suspicion from long-time customers. Commission income is sizable in Hong Kong. Last year, the city's brokers earned HK$19.90 billion in such fees, which was down 18 per cent from the previous year. Trading has picked up this year though, stoked by volatility from the coronavirus, helping to ease some of the pain. The average trading commission in Hong Kong is about 0.073 per cent, according to data collected from nine of the most popular brokers.