The race to zero appears to be nearing the finish line after several brokerage giants cut commissions on all U.S. equities, options and ETFs in the last few weeks.

Interactive Brokers was among the first to drop trading fees – offering zero-commission stock and ETF trading via its Interactive Brokers Lite service since late September.

But Charles Schwab really rocked the investment world by announcing zero fees across all stock trading last Tuesday – pushing rival brokers TD Ameritrade, E-Trade, Ally Invest and Fidelity to follow suit just days later.

Reginald Browne from GTS said the name of the game is keeping clients and increasing assets. In other words, it's all about scale.

"I think it's about increased investor confidence and another log on the fire around transparency," he said Monday on CNBC's "ETF Edge." "The ETF industry has done a tremendous job around innovation. This is now nothing more than gale force winds behind the ETF industry to get more assets and to drive investor confidence and lower costs."

That might be good news for the average investor, but shares of all the major online brokers immediately traded down following those announcements – as these fee reductions result in one less stream of revenue for trading platforms. But some brokers are more reliant upon transaction costs than others.

For instance, commissions only comprise a small portion of total revenues at Schwab – less than 10%. Schwab gets nearly 60% of its revenues from interest from its banking business, as well as its asset management business, which generates nearly a third of its revenues.

Charles Schwab

% of Total Revenues

Net Interest: 57%

Asset Management: 32%

Trading Fees: 8% Other: 3% Source: Morningstar

But commissions make up a much bigger chunk of the revenue pie for the likes of TD Ameritrade (roughly 30% - excluding order routing revenue) and E-Trade (approximately 30%).

TD Ameritrade

% of Total Revenues

Commissions & Transactions: 25%

Bank Deposit Accounts Fees: 28%

Net Interest: 23% Investment Product Fees: 10% Source: TD Ameritrade

Companies are learning to adapt in an era of rock-bottom interest rates and lower trading costs by looking to other avenues – such as banking and providing market data to clients. The focus is all on client engagement now – which Browne says is currently at an all-time high.

"There are other types of businesses inside that can capture the revenues [that are] being shifted," he said. "It's about growing the client spirit internally. I think these companies have it and understand how to pivot hard."

Competition is getting more intense by the minute. J.P. Morgan Securities recently launched its own free stock-trading platform, "You Invest," and Bank of America rolled out its discount brokerage arm, Merrill Edge, back in 2010, which provides clients with commission-free trades through its Preferred Rewards program.

One thing is clear – the onus is now on startups like Robinhood, which has run commission-free trades for years, to figure out new ways to set themselves apart from the broker behemoths. And now that the race to zero is almost over, the next battleground could well be competitive interest rates. Fidelity unveiled plans to redirect clients' cash into higher-yielding money-market funds back in August – hoping to sweeten the deal for both new and existing customers.

But all of these cost-cutting moves have broader implications that will likely reverberate across the ETF and asset management space. Right now, the top 10 fund families continue to control 95% of the business. And with more than 2,000 ETFs in the marketplace and roughly 120 fund families out there, many experts are bracing for a wave of industry consolidation.

Schwab founder and chairman Charles Schwab himself told CNBC just earlier this week that consolidation will likely occur – and that Schwab itself would be a buyer at the right price.

Disclaimer