Mexico Retail Stock Brokerage Market

Part
01
of three
Part
01

Retail Stock Brokerages: Mexico

The top financial institutions offering retail stock brokerage accounts in Mexico include Actinver, Casa de Bolsa Finamex, Casa de Bolsa Banorte, and GBM Grupo Bursátil Mexicano.

Actinver

  • Actinver is one of the top financial institutions offering retail stock brokerage accounts in Mexico.
  • The firm offers services that allow individuals to buy and trade stocks easily and provide financial advice to individuals. Actinver has been operational for over 25 years and focuses on making it easy for new traders and investors to trade and invest in stocks by offering services such as daily reports, analysis, guidance, and investment recommendations.
  • Actinver also provides professionally managed investment solutions for individuals.
  • The company targets new, experienced, and sophisticated investors and tailors different products to suit each kind of investor. They also target customers by investment goals such as those looking to invest to meet their retirement, education, or business goals.
  • The company generated a revenue of $128 million in 2018.

Casa de Bolsa Finamex

Casa de Bolsa Banorte

GBM Grupo Bursátil Mexicano, S.A. de C.V., Casa de Bolsa

  • GBM Grupo Bursátil Mexicano, S.A. de C.V., Casa de Bolsa is one of the top financial institutions offering retail stock brokerage accounts in Mexico.
  • The company offers retail stock trading services to individuals and provides tools that make it easy for individuals both new and experienced to trade stocks easily. GBM has been serving Mexicans for over 3 decades and also provides an academy where individuals can learn how to invest the right way.
  • They also have a team of experienced analysts and provide advice to individuals looking to invest.
  • The company primarily targets individuals, especially those that are tech-savvy.
  • The company generated $48.43 million in revenue in 2018.



Part
02
of three
Part
02

Retail Stock Trading Industry Overview: Mexico

In Mexico, retail stock trading generally is done through large brokerage firms online that generally charge a commission for their services either as a set amount or as a percentage of return. These brokerage firms can trade in one or both of Mexico's stock exchange markets located in Mexico City. Details of the market have been provided below.

Overview

  • In Mexico, retail stocks can be traded in one of two stock trading markets; the Mexican Stock Exchange or Bolsa Mexicana de Valores (BMV) and Bolsa Institucional de Valores (BIVA). Both markets are headquartered in Mexico City and offer the same types of products and services.
  • Mexico has potential access to up to 60% of the world's Gross Domestic Product (GDP) with 11 trading agreements across 44 countries.
  • The market has access to free trade with the United States and the European Union (EU).

Industry Offerings

  • When trading through a broker there are two types of fees to be worried about; minimum accounts and commissions.
    • Minimum investment amount: When initially investing, account holders will have to pay a minimum amount to the brokers. Retail amounts range from $0.00 pesos to $250 pesos from the most recommended brokers, however, it can reach up to $2,500 depending on the type of account. Initial investments can be made through ACH transfers from a bank account and can be set up to automatically continue transferring to continue building on the initial investment.
    • Commissions: When trading through a broker, they can charge a commission on the stocks traded. This means that more frequent trading results in more commissions paid to brokers. Commissions can be a set amount per trade or as a share per trade. Commission amounts are dependent on the brokerage firm and the type of trading account.
  • Retail trading in Mexico generally is done with an independent brokerage or full-service brokerage services.
  • According to 69 brokerage firms in Mexico, 54-87% of retail CDF accounts lose money. These brokerage firms cross-sell several products and services including but not limited to Forex, Indices, Stocks, Cryptocurrencies, Commodities, and CDFs on platforms such as mobile apps, MT4, and Web Trader.
  • In addition, brokerages can cross-sell on both markets by either listing with one exchange and allowing quotes on both or by listing with both markets.

Technology-Enabled Companies

  • After scouring industry reports, stock trading databases, and news publications, we were unable to identify any new stock trading companies that have emerged in the retail stock trading market in the past 12-18 months, however, we were able to find the top-rated brokers in 2020 as listed below.
  • IC Markets: established in 2007.
  • Etoro: established in 2006.
  • Fpmarkets: established in 2005.
  • Trading212: established in 2006.
  • Pepperstone: established in 2010.
  • Xtb online trading: established in 2002.

Part
03
of three
Part
03

Retail Stock Broker Habits: Mexico

After an exhaustive search through retail brokerage firms' websites, LinkedIn, news articles, media articles, industry reports, and websites with information about stocks and securities, we were unable to find information surrounding the trading habits or preferences of the typical retail stock broker in Mexico. All the information in the public domain was centered around issues such as the best brokers in Mexico and broker comparison. We have provided a summary of our helpful findings below in relation to the activities of retail stock brokers.

Helpful Findings on the Activities Retail Stock Brokers

  • Retail brokers issue securities' advice and participate in initial public offerings (IPO) as the investor's representative. After the IPO, they provide market liquidity as the market markers, maintaining the buying and selling positions constantly for specific securities.
  • On a daily basis, they also make buy-sell transactions, securities, and repo lending, acting on behalf of their clients and themselves.
  • Through the brokers, brokerage firms are able to carry out administration and custody of securities and liquidation of operations.
  • Portfolio management is also done through the making of investment decisions for clients.
  • Brokers also provide market and security analysis and make buy-sell security recommendations to the clients.
  • They also act as trustees, fiduciaries, and executors of loans with the pledge of securities. Also, they distribute mutual fund shares.
  • Through the brokerage firms, the brokers can offer customers currencies, coined metals, and derivatives.
  • Their permissible activities are set by the Securities Market Act.
  • Brokerage firms identify the customers' investment objectives and risk profiles while accounting for their experience and financial knowledge. Other factors that need taking into account are the track record in account management, financial situation, investment horizon, and any restrictions that are placed by the customer.
  • Examples of retail stock brokerage firms in Mexico where retail stock brokers work are:

Research Strategy

We searched through the websites of retail brokerage firms hoping to identify articles or general information surrounding the trading habits of brokers working in these firms. The firms include The Retail Brokers, Vector, and GBM. However, none of the websites had any information pertaining to the habits or preferences of stock brokers. Instead, they provided details such as the number of brokers that they have and why they are the best choice. Next, we searched through LinkedIn to identify profiles and accounts of retail stock brokers in Mexico and whether they included any information associated with their habits and preferences. An overview of several brokers would have helped with identifying similarities and hence generalized results for Mexico. However, for the profiles that we found, there was no indication of preferences or habits surrounding trading. Finally, we searched through news articles, media articles, industry reports, and websites with information about stocks and securities in Mexico. These included CompareBrokers, Select a Broker, Benzinga, and Broker Notes. We were hoping to find comprehensive information surrounding the habits and preferences of stock brokers, issues about account balances, international, and domestic stocks. However, this strategy was also unsuccessful since no details surrounding the brokers were available. Instead, we found information such as the best brokers in Mexico, and broker comparison. We also found news about a partnership between Flink, a Mexico-based neobank, and DriveWealth, LLC, a U.S.- based leader in global digital trading technology that has provided access to international stocks in Mexico, which could have introduced a relevant change to the habits of stock brokers.
Sources
Sources