The next frontier in retail brokerage revenue
11 March 2026
Tony Camarota, head of Spire at EquiLend, reviews how fully paid lending turns dormant assets into scalable income
Image: stock.adobe.com/Photocreo Bednarek
Retail brokerages face a revenue crisis hiding in plain sight. Commission-free trading eliminated a core income stream. Payment for order flow invites regulatory scrutiny and reputational risk. Net interest income swings with rate volatility. Yet trillions of dollars in customer assets sit dormant on broker balance sheets, generating nothing.
The solution is not encouraging more trades or launching another product, it is monetising what you already have.
The overlooked asset class: Idle customer securities
Retail investors hold long-only positions in stocks, bonds, and ETFs that rarely move. These securities have real economic value to the securities lending market, where hedge funds, market makers, and institutional investors need them for short selling, hedging, and maintaining market liquidity. Demand for borrow is persistent and often increases during low-volatility periods when retail activity slows.
The supply exists. The demand is constant. What has been missing is scalable, compliant infrastructure to bridge the gap.
Fully Paid Lending (FPL) closes it.
What fully paid lending actually is
FPL allows brokers to lend customer securities that are fully paid for or represent excess margin, with explicit customer consent. Customers receive a share of the lending revenue. The broker earns recurring income without deploying proprietary capital or changing customer investment strategies. Securities lending is no small business; it generated more than US$15 billion for lenders in 2025, according to EquiLend data.
Here is how it works in practice: a customer holds 500 shares of a widely shorted stock worth US$25,000. They opt into FPL. Those shares go on loan, generating perhaps US$200-400 annually in passive income for the customer while the broker captures its share. The customer retains full ownership, all market exposure, and can sell at any time with securities recalled automatically.
Unlike traditional revenue models, FPL scales with assets under custody, not trading volume. It rewards brokers for holding customer relationships, not churning them.
Clearing up what FPL is not
It does not increase market risk. Customer economic exposure remains identical. They keep all upside and downside. The only change is a temporary loan of the security that generates incremental income.
It does not lock up assets. Modern FPL programmes include recall mechanisms that return securities immediately when customers sell or transfer positions. Lending happens in the background and is operationally invisible.
It is not complex or opaque. Transparent disclosures, clear revenue sharing, and detailed reporting show customers exactly what they earn and why. When implemented correctly, FPL is conservative, opt-in, and straightforward.
Representing the next revenue frontier
Fully Paid Lending aligns with where retail economics are heading, not where they have been.
It delivers recurring revenue that accrues daily and compounds as assets grow, creating predictable income compared to transaction-driven models. It scales automatically as platforms add customers and assets, requiring no new products or licenses. It operates with minimal capital, avoiding the balance sheet intensity of margin lending or principal trading. And it strengthens retention by giving customers passive income on assets they already hold, making platforms stickier and accounts less likely to migrate.
For a mid-sized broker with US$10 billion in retail assets, a well-run FPL programme can generate millions in annual revenue at utilisation rates of just 5-10 per cent of eligible inventory.
Why retail has been slow to adopt
The barriers have been real. Managing recalls, corporate actions, collateral movements, and revenue splits across millions of accounts is operationally intensive. Many retail brokers lack direct connectivity to global securities finance markets or real-time optimisation tools. And there has been legitimate hesitation around client education — poorly implemented programmes risk confusion or mistrust.
But these barriers are no longer structural. Modern platforms now automate the operational complexity while giving brokers control over programme design, risk parameters, and client communication.
The brokers winning with FPL treat it as core infrastructure, not a bolt-on experiment.
That means integrating lending into a broader strategy: educating clients through clear disclosures, optimising inventory distribution across global borrowers, actively managing utilisation and recall risk, and reporting lending income as a strategic line item. When FPL runs as a background revenue engine rather than a marginal yield enhancement, it becomes a meaningful contributor to growth.
The firms that move first and execute well will establish competitive advantages that are difficult to replicate. Those that wait risk watching assets — and revenue — walk to competitors offering better economics.
Why EquiLend for fully paid lending
EquiLend brings institutional-grade securities finance infrastructure to retail brokerages without the institutional-grade complexity. Our FPL solution connects your retail inventory directly to global borrow demand while automating the operational heavy lifting that has historically held firms back. Fit for purpose for brokers starting new FPL programmes as well as those looking to optimise an existing FPL programme, EquiLend’s solution is tailored for retail brokers of all shapes and sizes.
Brokers and wealth managers that do not want to take on a principal role can also utilise the platform alongside their custodian’s lending desk or a third-party lending agent. These institutional lenders have the advantage of experience, multiple distribution channels, robust operational frameworks, and cutting-edge technology to ensure that revenue is maximised and risks are well managed.
From inventory optimisation and collateral management to recalls, reporting, and revenue transparency, we enable brokers to launch and scale FPL programmes quickly, compliantly, and profitably. The result is faster time to revenue, higher utilisation rates, and a lending programme that works quietly in the background while your platform grows.
We have eliminated the barriers. You bring the assets.
What comes next
Retail brokerage is evolving. Future growth will come less from encouraging more transactions and more from extracting value from existing relationships in smarter, more sustainable ways.
Fully Paid Lending sits at the centre of that shift. It is proven, scalable, and aligned with both market structure and customer expectations. The question is not whether to evaluate it. The question is whether you can afford to be the last in your segment to launch.
The next frontier is not somewhere on the horizon. It is already here.
The solution is not encouraging more trades or launching another product, it is monetising what you already have.
The overlooked asset class: Idle customer securities
Retail investors hold long-only positions in stocks, bonds, and ETFs that rarely move. These securities have real economic value to the securities lending market, where hedge funds, market makers, and institutional investors need them for short selling, hedging, and maintaining market liquidity. Demand for borrow is persistent and often increases during low-volatility periods when retail activity slows.
The supply exists. The demand is constant. What has been missing is scalable, compliant infrastructure to bridge the gap.
Fully Paid Lending (FPL) closes it.
What fully paid lending actually is
FPL allows brokers to lend customer securities that are fully paid for or represent excess margin, with explicit customer consent. Customers receive a share of the lending revenue. The broker earns recurring income without deploying proprietary capital or changing customer investment strategies. Securities lending is no small business; it generated more than US$15 billion for lenders in 2025, according to EquiLend data.
Here is how it works in practice: a customer holds 500 shares of a widely shorted stock worth US$25,000. They opt into FPL. Those shares go on loan, generating perhaps US$200-400 annually in passive income for the customer while the broker captures its share. The customer retains full ownership, all market exposure, and can sell at any time with securities recalled automatically.
Unlike traditional revenue models, FPL scales with assets under custody, not trading volume. It rewards brokers for holding customer relationships, not churning them.
Clearing up what FPL is not
It does not increase market risk. Customer economic exposure remains identical. They keep all upside and downside. The only change is a temporary loan of the security that generates incremental income.
It does not lock up assets. Modern FPL programmes include recall mechanisms that return securities immediately when customers sell or transfer positions. Lending happens in the background and is operationally invisible.
It is not complex or opaque. Transparent disclosures, clear revenue sharing, and detailed reporting show customers exactly what they earn and why. When implemented correctly, FPL is conservative, opt-in, and straightforward.
Representing the next revenue frontier
Fully Paid Lending aligns with where retail economics are heading, not where they have been.
It delivers recurring revenue that accrues daily and compounds as assets grow, creating predictable income compared to transaction-driven models. It scales automatically as platforms add customers and assets, requiring no new products or licenses. It operates with minimal capital, avoiding the balance sheet intensity of margin lending or principal trading. And it strengthens retention by giving customers passive income on assets they already hold, making platforms stickier and accounts less likely to migrate.
For a mid-sized broker with US$10 billion in retail assets, a well-run FPL programme can generate millions in annual revenue at utilisation rates of just 5-10 per cent of eligible inventory.
Why retail has been slow to adopt
The barriers have been real. Managing recalls, corporate actions, collateral movements, and revenue splits across millions of accounts is operationally intensive. Many retail brokers lack direct connectivity to global securities finance markets or real-time optimisation tools. And there has been legitimate hesitation around client education — poorly implemented programmes risk confusion or mistrust.
But these barriers are no longer structural. Modern platforms now automate the operational complexity while giving brokers control over programme design, risk parameters, and client communication.
The brokers winning with FPL treat it as core infrastructure, not a bolt-on experiment.
That means integrating lending into a broader strategy: educating clients through clear disclosures, optimising inventory distribution across global borrowers, actively managing utilisation and recall risk, and reporting lending income as a strategic line item. When FPL runs as a background revenue engine rather than a marginal yield enhancement, it becomes a meaningful contributor to growth.
The firms that move first and execute well will establish competitive advantages that are difficult to replicate. Those that wait risk watching assets — and revenue — walk to competitors offering better economics.
Why EquiLend for fully paid lending
EquiLend brings institutional-grade securities finance infrastructure to retail brokerages without the institutional-grade complexity. Our FPL solution connects your retail inventory directly to global borrow demand while automating the operational heavy lifting that has historically held firms back. Fit for purpose for brokers starting new FPL programmes as well as those looking to optimise an existing FPL programme, EquiLend’s solution is tailored for retail brokers of all shapes and sizes.
Brokers and wealth managers that do not want to take on a principal role can also utilise the platform alongside their custodian’s lending desk or a third-party lending agent. These institutional lenders have the advantage of experience, multiple distribution channels, robust operational frameworks, and cutting-edge technology to ensure that revenue is maximised and risks are well managed.
From inventory optimisation and collateral management to recalls, reporting, and revenue transparency, we enable brokers to launch and scale FPL programmes quickly, compliantly, and profitably. The result is faster time to revenue, higher utilisation rates, and a lending programme that works quietly in the background while your platform grows.
We have eliminated the barriers. You bring the assets.
What comes next
Retail brokerage is evolving. Future growth will come less from encouraging more transactions and more from extracting value from existing relationships in smarter, more sustainable ways.
Fully Paid Lending sits at the centre of that shift. It is proven, scalable, and aligned with both market structure and customer expectations. The question is not whether to evaluate it. The question is whether you can afford to be the last in your segment to launch.
The next frontier is not somewhere on the horizon. It is already here.
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