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Fly News Breaks for October 1, 2019
MS, RJF, SCHW
Oct 1, 2019 | 14:38 EDT
Buckingham analyst James Mitchell notes that companies under his coverage with full service brokerage operations are underperforming on Wednesday on the news that Charles Schwab (SCHW) cut commissions on listed equity products. While the analyst understands "the knee-jerk reaction" in names such as Raymond James (RJF) and Morgan Stanley (MS), he would emphasize that full service brokers have very different service models and customer bases than the discount brokers. Mitchell does not see the recent developments in the discount brokerage industry as materially impacting the pricing model of the full service brokers, although he would expect pricing to continue to decline in line with historical trends. That said, he acknowledges that the pricing war among the e-brokers is likely to remain a sentiment headwind on the full service players in the near- term. The analyst has Buy ratings on both Raymond James and Morgan Stanley.