AccountTECH data indicates larger brokerages face greater financial strain from commission rate drops than smaller ones, as large firms have higher fixed costs and overhead.
Mark Blagden highlights that many larger brokerages retain significant expenses related to office space and management. He compares this impact to the proverbial 'don't eat bread' advice at Weight Watchers.
Among smaller brokerages with fewer than 30 agents, 65% remain profitable at a 3% commission rate, in stark contrast to larger firms that show declining profitability.
Brokerages with 50 to 75 agents show the strongest resilience to commission cuts, indicating they may endure better than their larger counterparts, which struggle with lower margins.
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