n the past, mergers and acquisitions have played a big part in shrinking the number of firms included in the survey each year. In 2002, AAII’s Broker Survey included 77 on-line discount brokers. In 2003, there were 62, 54 in 2004, 47 in 2005 and 46 last year. This year, the firms in the comparison include the product of a merger (TD Ameritrade), a new addition (Zecco.com), and a firm that is back after opting out last year (USAA Brokerage Services).
The bar chart in Figure 1 traces the growth and subsequent decline in the number of on-line discount brokerage firms over the last 16 years. A big jump took place in 1996, soon after the launch of the first Internet-based broker.
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