New data from AccountTech shows that many brokerages are vulnerable to falling into the red as commission rates decline, with profit margins of just 3% or less.
AccountTech's analysis revealed that over half of the brokerages examined had profit margins hovering between a slim 3% profit and a slight loss, indicating a precarious financial position.
The analysis highlighted a concerning trend where only 5% of brokerages had an EBITDA margin above 9%, while 21% reported losses, showcasing the fragility in their financial health.
CEO Mark Blagden emphasized the need for brokerages to develop adaptive business models that can adjust expenses swiftly in a challenging commission landscape for sustainability.
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