Starting a company like ScottTrade/Ameritrade/eTrade when you're 21...stupid?

My friend had an idea today -- he has a contact with a european bank that supplies insurance, leverage, real time quotes, and basically 100% of the technology to start an online brokerage like ScottTrade and is willing to lease the technology to us for free provided we give him a cut of our customers' monthly subscriptions. All we have to do is come up with our own website, business name, and office (the only start up costs since they took care of the tech stuff). The customers would basically login to our site just like they would on ScottTrade and deposit money (the money would be deposited into the partner bank) and pay a subscription and trade.

When you read that, do you think "WTF are these kids thinking?? Stupid." or do you actually think it might be possible? I'm obviously a rookie at this and don't know what we'll be in for. Do we need an expensive lawyer to fill out any SEC forms?

Anyone have experience with this or have any stories to tell? We're only in college so obviously we aren't old enough to have any proper judgement about this specific type of business.

 

What makes you think you can beat ScottTrade, E*Trade, Charles Schwab, TradeKing, ThinkorSwim, Zecco, and the 100 other brokerages that have marketing budgets 100x larger than yours?

- Capt K - "Prestige is like a powerful magnet that warps even your beliefs about what you enjoy. If you want to make ambitious people waste their time on errands, bait the hook with prestige." - Paul Graham
 

I have no idea about the procedures, and I assume dealing with SEC and other regulator will be costly..On the other side, even if it wont work out, at least you will get something to talk about during an interview! If you can pull this together..sounds very impressive considering age etc..Good luck!

 

Realize too that a lot of these places are owned by prop firms that act as market-makers as well (Timber Hill, Citadel, etc.) and run these extremely tight since there are secondary ways to make money off their customers other than just transaction/account fees.

 

Molestias eos et consequatur. Velit dolores aperiam error maxime voluptas consequatur. Ut perspiciatis et voluptatem sint sunt.

Saepe voluptas eligendi ut ipsa est amet ab nihil. Saepe facere eum exercitationem quos animi. Qui sunt esse voluptas at.

Career Advancement Opportunities

April 2024 Investment Banking

  • Jefferies & Company 02 99.4%
  • Goldman Sachs 19 98.8%
  • Harris Williams & Co. New 98.3%
  • Lazard Freres 02 97.7%
  • JPMorgan Chase 03 97.1%

Overall Employee Satisfaction

April 2024 Investment Banking

  • Harris Williams & Co. 18 99.4%
  • JPMorgan Chase 10 98.8%
  • Lazard Freres 05 98.3%
  • Morgan Stanley 07 97.7%
  • William Blair 03 97.1%

Professional Growth Opportunities

April 2024 Investment Banking

  • Lazard Freres 01 99.4%
  • Jefferies & Company 02 98.8%
  • Goldman Sachs 17 98.3%
  • Moelis & Company 07 97.7%
  • JPMorgan Chase 05 97.1%

Total Avg Compensation

April 2024 Investment Banking

  • Director/MD (5) $648
  • Vice President (19) $385
  • Associates (86) $261
  • 3rd+ Year Analyst (13) $181
  • Intern/Summer Associate (33) $170
  • 2nd Year Analyst (66) $168
  • 1st Year Analyst (204) $159
  • Intern/Summer Analyst (145) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
BankonBanking's picture
BankonBanking
99.0
3
Betsy Massar's picture
Betsy Massar
99.0
4
Secyh62's picture
Secyh62
99.0
5
DrApeman's picture
DrApeman
98.9
6
GameTheory's picture
GameTheory
98.9
7
dosk17's picture
dosk17
98.9
8
kanon's picture
kanon
98.9
9
CompBanker's picture
CompBanker
98.9
10
Jamoldo's picture
Jamoldo
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”