Securities Brokers

The 7,735 investment banking and securities brokerage companies in the US generate revenue through securities underwriting and origination, managing securities markets, brokering securities for clients, and buying and selling securities on their own accounts. Firms charge asset management fees, earn commissions and transaction fees on client trades, and earn net interest revenue (difference between interest earned and brokerage interest expense) and fees for providing financial planning and advisory services. Firms may also receive “payment for order” for directing trades through a particular exchange or channel.

Regulated Environment

Investment banks and securities brokerages are highly regulated at the federal and state level.

Cyclical Performance

The investment banking and securities brokerage industry is cyclical with performance tied to the stock markets and influenced by domestic and global economic factors.

Growth in Self-directed Investors and Online Brokerage

The popularity of self-directed and online trading continues to grow, driven by investors’ increasing desire for control.

Sep 24, 2026 - Dealmaking Momentum Fades in the Third Quarter

• Investment bankers are seeing some of 2026’s dealmaking momentum fade as mergers and acquisitions activity loses steam after a blockbuster first half. Preliminary data from the London Stock Exchange Group (LSEG) shows global M&A activity dropped sharply in the third quarter, putting an end to a six-quarter run of more than $1 trillion in deals if the weakness holds through September. Bank of America CEO Brian Moynihan said the broader investment banking market is running about 10% below last year, with his bank expecting third-quarter fees to fall by at least 10%. The slowdown isn’t universal. JPMorgan expects its investment banking fees to rise by a mid-to-high-teens percentage, reflecting a strong pipeline and continued deal activity. Fewer megadeals are weighing on overall transaction value, while higher interest rates and persistent inflation could make financing more difficult and cause some companies to delay transactions.
• Elevated market volatility in 2026 is creating one of the best trading environments Wall Street has seen in years. Instead of waiting for mergers or stock offerings to close, securities trading desks are benefiting from investors buying, selling, and repositioning portfolios as markets react to everything from AI-related enthusiasm to geopolitical uncertainty. Every swing in the market creates opportunities for market makers and brokers to execute trades, hedge risk, and earn trading revenue. The payoff has been significant. Goldman Sachs reported a 72% increase in equities trading revenue during the second quarter, while Bank of America posted a record $7.1 billion in sales and trading revenue. Morgan Stanley and Barclays also credited unusually active markets for strong trading results, suggesting client demand remains strong even as the economic outlook shifts. Rather than slowing business, uncertainty has become one of the industry's biggest revenue drivers.
• Private-equity firms are increasingly using their subsidiary or affiliated life insurance companies as buyers for their own investment products. The trend is raising concerns among financial regulators about conflicts of interest and risks to policyholders. Affiliated investments at US life insurers reached $413 billion in 2025 - double the 2020 level - with firms such as Apollo, Brookfield and KKR steering large volumes of private credit into insurer portfolios. Critics warn that asset managers could overcharge insurers or offload risky, illiquid assets, while insurers say they maintain safeguards and benefit from privileged access to attractive deals. Regulators in the US and abroad are scrutinizing the trend, especially as these investments make up a growing share of insurers’ core bond holdings and often involve complex asset-backed securities.
• Wall Street investment bankers and traders saw record-breaking bonuses in 2025, with average payouts reaching $246,900 (a 6% increase from the prior year), according to the New York State Comptroller. The securities industry's total bonus pool hit $49.2 billion, a new record, driven by a standout year in corporate dealmaking and stock and bond trading at the nation's largest banks. Bonuses remain a defining feature of Wall Street compensation, accounting for nearly half of the average $505,677 in total pay for securities industry employees in 2024. Payouts still fell short of New York City's projections, though, which had anticipated a 15% increase, complicating Mayor Zohran Mamdani's efforts to close a $5 billion budget gap. The bonuses are expected to generate roughly $199 million in state income tax revenue, though tensions between the mayor and Wall Street remain high as he pushes for tax hikes on high earners.

Industry size & Structure

The average investment banking and securities brokerage firm operates out of two to three locations, employs 45 workers, and generates $38.5 million annually.

• The investment banking and securities brokerage industry includes 7,735 firms that employ about 349,770 workers and generate about $297.9 billion annually.
• The industry is highly concentrated; the top 50 companies account for over 85% of industry revenue.
• Large investment banking companies include Morgan Stanley, Goldman Sachs, JP Morgan Chase, Bank of America, and Vanguard. Large securities brokerage firms include Charles Schwab, TD Ameritrade, StoneX, and Merrill Lynch. Large firms may have a global presence.