Offer your thoughts or opinion on the input financial query or topic using your financial background.

How do brokerage firms make money?
Regarding "Interest on idle cash",  brokerage firms must maintain a segregated account on the brokerage firm's books to make sure that the client's money and the firm's money is not intermingled, and clients funds are not used for operational purposes. Source.   Thus, brokerage firms do not earn interest on cash that is held unused in client accounts. Regarding "Exchanges pay firm for liquidity", I am not aware of any circumstances under which an exchange will pay a brokerage any such fee.  In fact, the opposite is the case.  Exchanges charge participants to transact business. See : How the NYSE makes money Similarly, market makers do not pay a broker to transact business on their behalf.  They charge the broker a commission just like the broker charges their client a commission.  Of course, a large broker may also be acting as market maker or deal directly with the exchange, in which case no such commission will be incurred by the broker.  In any case, the broker will pay a commission to the clearing house.