Trader Longevity Is the Missing Metric For Broker Performance

Brokerage firms universally track metrics like customer acquisition cost and daily trading volume, yet systematically omit the most direct measure of client outcome: trader longevity. A report from investinglive.com on June 30, 2026, argues that internal scoreboards are built on numbers that can grow while the traders behind them fail. The industry's focus on activity-based data points creates a stark misalignment, leaving a fundamental question for investors unanswered. No widely published metric reveals whether a broker's ecosystem actually helps its users survive and succeed in the markets over the long term.

Context — why this matters now

Heightened retail trading activity since the 2021 meme-stock phenomenon has placed brokers under increased regulatory and social scrutiny. The U.S. Securities and Exchange Commission issued a 2023 report noting that 75% of actively managed retail brokerage accounts underperformed a simple index fund over a ten-year period. Against this backdrop, the standard metrics of success for brokerages remain oriented toward growth, not sustainability.

The current macro backdrop features elevated market volatility, with the CBOE Volatility Index averaging above 18 for the past year. Retail participation remains a significant force, accounting for approximately 22% of U.S. equity trading volume according to 2025 Bloomberg data. The catalyst for examining broker performance metrics is a growing disconnect. Marketing campaigns highlight platform features and low costs, yet client attrition and loss rates are seldom disclosed, creating an information asymmetry that disadvantages the end user.

Data — what the numbers show

Industry-standard broker metrics are almost exclusively acquisition and activity-focused. A typical firm tracks customer acquisition cost, which ranges from $200 to $500 for a retail account. Conversion rates from demo to live accounts average 8-12%. The average first deposit for a retail trading account is $2,500, while the time-to-first-trade after funding is often under 48 hours.

Metric	Typical Broker Focus	Alternate Focus (Rarely Tracked)
Key Performance Indicator	Daily Active Users	Trader Longevity (Median Account Survival Time)
Growth Measurement	Quarterly Net New Deposits	Percentage of Accounts Profitable After 2 Years
User Engagement	Trades Per User Per Month	Risk-Adjusted Return of Median User Portfolio

Brokers publicly report user growth, with major platforms adding millions of accounts annually. In contrast, data on long-term user outcomes is virtually absent from earnings calls and annual reports. A 2024 academic study of European retail brokers estimated the median survival time for a new funded account was just 3.2 months, a figure not published by any of the participating firms.

Analysis — what it means for markets / sectors / tickers

A shift toward longevity-based metrics would reconfigure competitive advantages within the financial sector. Brokerage firms with strong educational infrastructure and tools promoting disciplined risk management, such as Interactive Brokers (IBKR), could see a re-rating. Conversely, platforms optimized primarily for high-frequency engagement and speculative options trading might face reputational and regulatory pressure if longevity data became transparent.

Payment-for-order-flow revenue models, which generated over $4.5 billion for U.S. brokers in 2025, are inherently tied to trading volume. A longevity-focused lens questions the sustainability of this model if it incentivizes excessive client turnover. The counter-argument is that measuring longevity alone is insufficient, as it could penalize brokers serving sophisticated, short-term tactical traders. A comprehensive view would require a suite of outcome-based metrics, not a single number.

Positioning flows are already hinting at this divide. Institutional capital has flowed into providers of structured products and managed accounts, which report on client outcomes. Retail-focused trading app stocks have underperformed the broader SPX Financials sector by 15% year-to-date, reflecting investor skepticism about long-term engagement durability.

Outlook — what to watch next

Regulatory developments will provide the next major catalysts. The European Securities and Markets Authority is reviewing its Markets in Financial Instruments Directive (MiFID) rules, with a consultation paper on retail investor protection due in Q4 2026. In the U.S., the SEC's agenda includes a potential rule on best execution reporting, which could indirectly shed light on order routing practices that affect client outcomes.

Key levels to watch are client attrition rates in quarterly filings from public brokers like Charles Schwab (SCHW) and Robinhood (HOOD). A sustained move above 5% quarterly churn for funded accounts would signal deepening engagement problems. Another threshold is the ratio of educational content consumption to trading volume on platform analytics, a potential leading indicator for longevity.

The outcome hinges on whether a major broker breaks rank and begins publishing longevity data, creating a new transparency standard. If one firm does so, it could force the entire industry to follow or justify its omission.

Frequently Asked Questions

What does trader longevity mean for retail investors?

Trader longevity measures how long the median funded account remains active and solvent before closing. For retail investors, a broker with high longevity statistically suggests its users are not blowing up their accounts quickly. This metric serves as a proxy for whether the broker's tools, fees, order execution, and ecosystem help users manage markets sustainably rather than just encouraging frequent, high-risk trading that generates revenue for the firm.

How does this compare to traditional investment advisor metrics?

Registered Investment Advisors (RIAs) are legally bound by a fiduciary duty and typically report on portfolio performance and risk metrics relative to benchmarks over multi-year periods. The broker model, operating under a suitability standard, has historically reported on growth and activity. The longevity debate asks whether brokers serving self-directed traders should adopt outcome-focused reporting standards closer to the advisory world, even without a full fiduciary mandate.

Is there historical precedent for a metric shift in finance?

Yes. The widespread adoption of the Sharpe ratio in the 1990s changed how investment performance was evaluated, prioritizing risk-adjusted returns over raw gains. More recently, the 2022 SEC rules mandating standardized cost disclosure for mutual funds and ETFs forced a shift toward transparency. A move to longevity reporting would be a similar structural shift, moving from measuring what is easy for the firm to measure what is meaningful for the client.

Bottom Line

The brokerage industry's refusal to measure trader longevity reveals a fundamental conflict between its commercial incentives and its clients' long-term financial success.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. CFD trading carries high risk of capital loss.