Well what other factors...for example: does the firm cover your data fees, is the commission SIGNIFICANTLY lower. If the firm is doing this then the split is the way to go, because then your interests and the firms interest are in the same direction : profit. The commission fee only model at 100% payout means the firm influences you to TRADE MORE, because thats the only way they make money, they will also LIKELY markup all of your fees and their fees as well. In theory I think this is correct. These types of firms basically favor high trading frequency models because they are only taking soft dollars. Firms now who are looking for hard dollars may be much more interested in your profitability, not you churning up share volume, and this could lead to a synergistic relationship where you become better. When I was at firm X I had this relationship and it was fantastic.
In practice, in a split, if the fees are not as near to zero or the commissions are not just fractionally greater than their costs, this model sucks. Some firms might want to take a split without showing you that your fees are significantly reduced, I would just look elsewhere if this is the cast. In addition, will the firm share in your losses? How is your capital treated if you make some kind of deposit?
The answer here is not canned but depends on many of these factors. If I could get a split and can CLEARLY see, by the firm providing me info not me begging for it, that their interests and mine are clearly in line, then I would consider such an offer seriously. If the firm is not transparent on this one, then again, look elsewhere.
In a split relationship you might have to ask your self "what is the firm doing that deserves 20% of my profit." That is a lot of money to a profitable trader, contrary to what the prior posters have written. Again if the trader costs are as near to firm costs as possible, because fees and coms are significant, it's worth looking into further. But this must be determined by you clearly understanding your trading cost metrics and how things would change if the payout model changes and by how much, and if your fees are different enough and by how much, and a more or less subjective feeling on how this particular firm you are looking at can add to your profitability (if they provide significant more leverage on your same base equity, do they have programmers that will code things for you, how easy is it to get money into and out of your account or sub account).
Clearly these is no one answer that will work for all traders X all firms that split.
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