529 College Savings Cost Per Acquisition

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529 College Savings - Cost Per Acquisition

After a thorough search through credible sources, we were not able to provide information on cost per acquisition for 529 college savings plans, cost per acquisition for other related financial services, and cost per acquisition for a brokerage account. As the information for the first two entities is confirmed to be unavailable for the second time, we focused our search on brokerage accounts and provided the general overview of brokerage account acquisition and brokerage fee. We presented these helpful findings below together with the details of the team's research strategies to find the required information.

GENERAL overview of BROKERAGE account acquisition

  • A brokerage fee is based on a percentage of transactions. Its either flat fee or hybrid fee depending on the type of industry.
  • Usually, the broker's website contains plain sight of their brokerage fees detailing every breakdown or they provide 24/7 customer service hotline for a client's question.
  • There is a different type of brokerage account and brokerage fee also vary according to type. There are online/discount brokerage, managed/full-service brokerage and retirement account.
  • Brokerage fee may consist of an annual fee, research investment data fee, and inactivity fee.
  • Some brokers offer commission-free trading like Robinhood.
  • The typical trading fee cost $5-$7.
  • Mutual fund transaction fee typically cost $10-$75.
  • Expenses ratio are charged by mutual fund and are usually shown as a percentage of the investment or charged annually. This expense ratio typically 0.25% to 1%.

BROKERAGE FEE (breakdown)

Brokerage fee typically includes the following:
  • An annual fee which cost $50-$75 per year
  • Inactivity fee which cost $50-$200 annually and it may be assessed into monthly, quarterly or annually
  • Research and data subscription which is worth $1-$30 monthly
  • Trading platform fee which cost $50 to more than $200 monthly
  • Paper statement fees which cost $1-$2 per statement
  • Account closing/transfer fees which cost $50-$75

OTHER HELPFUL FINDINGS

  • In 2018, E-Trade Financial Corp acquired 1 million retail brokerage accounts from Capital One Financial.
  • The cost of acquisition was about $18 billion of Capital One clients' assets.
  • $170 million will be given as payment by the discount brokerage to the brokerage account which sums up to $1.7 billion cash and $115 million margin loans.


Research Strategy:

In trying to find the cost per acquisition for 529 college savings plans, cost per acquisition for other related financial services, and cost per acquisition for a brokerage account, we initially searched for the data through industry reports from Reuters Finance, WSJ, and Market Watch among others. We were hoping to find an example of the total cost of acquisition for any of these entities but data is not available. Since data for 529 college savings plan and other related financial services are proven to be not available, we focused our search on acquiring information related to the brokerage account cost per acquisition.

Throughout our search focusing on brokerage accounts, results only gave us details about brokerage fee by different brokerage firms and one example of acquisition of retail brokerage account. Unfortunately, there were no results about the cost per acquisition for a brokerage account. However, we included this example in our helpful findings because this information can be relevant to the study.

Secondly, we tried searching for different brokerage firms in the United States and see if we could get any report from their website if they had acquired any brokerage accounts through the years. We tried searching through their financial report to find information about their company growth, expansion, and outlook on any account acquisition. Information on the financial reports of the brokerage firms only cited some of their possible investments in stocks and possible partnership in the following year. We did not find any relevant data about the cost per acquisition for brokerage accounts and other acquisition costs.

Lastly, we tried to triangulate the requested information by looking for sources where we can find a financial firm who had sold their brokerage account to another financial firm. In the course of our search, the results are all about the different brokerage firms in the United States and the information about the business performance of their brokerage firm and why they are chosen by clients. We did not find any relevant data connected with the cost per acquisition for brokerage accounts and other acquisition costs.

Due to the unavailability of data pertaining to the cost per acquisition for brokerage accounts and other acquisition costs, we assumed that it is because acquisition cost varies amongst financial firms and there is no standard or average cost per acquisition for brokerage accounts. We can also assume that the reason why it is not available is that almost all financial institutions in the stock market are privately held.

Sources
Sources

Quotes
  • "Brokerage fees, also known as broker fees, are based on a percentage of the transaction, as a flat fee, or a hybrid of the two. Brokerage fees vary according to the industry and type of broker."
Quotes
  • "In general, you can avoid or minimize brokerage account fees by choosing an online broker that is a good match for your trading and investing style."
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  • "A brokerage account is an investment account. You can open and fund a brokerage account at a brokerage firm. The firm helps you place investment orders, and typically collects a commission for doing so."