BROWSE

Inactivity Fee

What is 'Inactivity Fee'

1. A sum charged to investors who haven't engaged in any buying or selling activities in their brokerage accounts for an amount of time specified by the brokerage.

Explaining 'Inactivity Fee'

1. One way that brokerages make money is from commissions on trades. When a customer makes infrequent trades, the brokerage doesn't make money from that customer, and it may try to compensate for the lack of commissions by charging inactivity fees. Smaller, passive investors who make a small number of trades are the most disadvantaged by inactivity fees.


Further Reading


Physically active, low-income African American women: an exploration of activity maintenance in the context of sociodemographic factors associated with inactivity
www.tandfonline.com [PDF]
… Intervention studies designed to increase physical activity among inactive and underactive African American … of Activity Maintenance in the Context of Sociodemographic Factors Associated with Inactivity … prominently in this challenge was the ability to access fee-for-service …

Restoring rational choice: The challenge of consumer financial regulationRestoring rational choice: The challenge of consumer financial regulation
www.aeaweb.org [PDF]
… Intervention studies designed to increase physical activity among inactive and underactive African American … of Activity Maintenance in the Context of Sociodemographic Factors Associated with Inactivity … prominently in this challenge was the ability to access fee-for-service …

Stored Value Cards and Financial InstitutionsStored Value Cards and Financial Institutions
www.questia.com [PDF]
… Intervention studies designed to increase physical activity among inactive and underactive African American … of Activity Maintenance in the Context of Sociodemographic Factors Associated with Inactivity … prominently in this challenge was the ability to access fee-for-service …

Regulating consumer financial products: Evidence from credit cardsRegulating consumer financial products: Evidence from credit cards
academic.oup.com [PDF]
… Intervention studies designed to increase physical activity among inactive and underactive African American … of Activity Maintenance in the Context of Sociodemographic Factors Associated with Inactivity … prominently in this challenge was the ability to access fee-for-service …

Trading fees and efficiency in limit order marketsTrading fees and efficiency in limit order markets
academic.oup.com [PDF]
… Intervention studies designed to increase physical activity among inactive and underactive African American … of Activity Maintenance in the Context of Sociodemographic Factors Associated with Inactivity … prominently in this challenge was the ability to access fee-for-service …

Economic interventions to promote physical activity: application of the SLOTH modelEconomic interventions to promote physical activity: application of the SLOTH model
www.sciencedirect.com [PDF]
… Intervention studies designed to increase physical activity among inactive and underactive African American … of Activity Maintenance in the Context of Sociodemographic Factors Associated with Inactivity … prominently in this challenge was the ability to access fee-for-service …

Credit card pricing: The card act and beyondCredit card pricing: The card act and beyond
heinonline.org [PDF]
… Intervention studies designed to increase physical activity among inactive and underactive African American … of Activity Maintenance in the Context of Sociodemographic Factors Associated with Inactivity … prominently in this challenge was the ability to access fee-for-service …



Q&A About Inactivity Fee


Why doesn't a brokerage make money from infrequent traders?

Because they don't engage in buying or selling activities.

What does "fee" allow for?

Fees usually allow for overhead costs, wages, costs and markup.

How does a brokerage make money from its customers?

From commissions on trades.

How do brokerages try to compensate for lack of commissions from infrequent traders?

By charging inactive fees.

Who are the most disadvantaged by inactivity fees?

Smaller, passive investors who make a small number of trades are the most disadvantaged by inactivity fees.

What is an inactivity fee?

An inactivity fee is a sum charged to investors who haven't engaged in any buying or selling activities in their brokerage accounts for an amount of time specified by the brokerage.

What does "service fee," "service charge," and "surcharge" mean?

Service charges are added to customer bills in order to pay travel time expenses, truck rental fees liability insurance and equipment rental fees among other things. They can be used as an alternative payment method instead of cash payments from customers who do not have credit cards available to them but still wish to use these types of services provided by businesses which require payment up front before providing goods or services requested by customers (e.g., car washes). The purpose of this type of surcharge depends on the nature of the product being sold along with corresponding service provided (e.g., hotel room cleaning). In some cases it can be used as an incentive program where consumers get discounts on products/services if they agree not to use certain features e.g

What does "fee" mean?

Fee means one pays as remuneration for rights or services.