It Turns Out Zecco’s Free Trading Model Isn’t Such A Good Idea

We outlined three points in 2006 on why Zecco's free trading model raised some red flags. Unsurprisingly, the discount online brokerage firm has been forced to change its pricing structure due to the economic crisis. Over the years, the zero commission brokerage service increased the minimum asset balance to $2,500 and decreased free trades from 40 to 10. Now the company is putting further restrictions on trades. In a letter to customers, CEO Jeroen Veth says that as of March 1 customers will be required to have $25,000 in assets to qualify for free trades. The full letter is below. Why? Zecco is no longer making money thanks to the now low interest rates on customers accounts. And revenue from discounted commissions are amounting to very little.