The fee slashing has already hit stocks of online brokerage companies. In early February, after Charles Schwab cut its trade commission to $6.95, the shares of E-Trade Financial and TD Ameritrade tanked. Later that month, Fidelity announced a cut to its base stock-trading commission rate from $7.95 to $4.95 per trade. Schwab then responded by matching Fidelity's rates.
Even as the markets surged this year, stocks of online brokers haven't boomed. E-Trade Financial has managed a small gain, while TD Ameritrade is down more than 12 percent and Interactive Brokers is down more than 4 percent.
One of the things brokers lowering their fees may not want investors to know is that there may already be better options, especially for investors who decide based on fees alone. In addition to Robinhood's free trading, Interactive Brokers, which has historically offered the lowest fees, now boasts a $1 trading fee.
The price war would not be occurring without the huge move by investors into low-cost, exchange-traded funds, which can be bought and sold throughout the day. ETFs are on pace for $3 trillion in assets by the end of this year, and have already taken in more than $170 billion from investors in 2017. ETFs are amassing assets at a clip of more than $1 billion a day.
Traditional financial companies, such as the Vanguard Group, do offer free trading on their platform when investors are buying their proprietary products, such as ETFs, and for select client groups.