Online Broker Review and Comparison
April 28, 2009
Online broker reviews differ from site to site because every investor has different things they look for in an online brokerage. Comparing brokers is actually the easy part, choosing the right brokerage site for you is the tricky part. So today we have a comparison of online brokers from someone with considerable experience in the financial industry.
Online Broker Review
I was recently asked to compare online brokers and it could not have come at a better time. Recently I ended an eleven year career in the financial services industry and knew I needed to move my 401K from my former employer. I felt that I had enough experience to manage my own funds, and besides, it would be difficult to find a financial advisor to take on my relatively small retirement nest egg.
So as I started off on this path of discovery, I chose to stick with names I knew:
- Scottrade
- Charles Schwab
- TD Ameritrade
- Fidelity
- E*Trade
Fee Structures and Commissions
| Market & Limit Orders | Options | Broker Assisted Trades | Real Time Dow Jones News | |
| Scottrade | $7/Unlimited Shares | $7+$1.25/ contract | $27/Unlimited Shares | Complimentary |
| Charles Schwab | $12.95+$.015/share over 1,000 shares | $8.95+$.75/ contract | $25.00+online Commission | Complimentary for active traders |
| TD Ameritrade | $9.99/Unlimited Shares | $9.99+$.75/ contract | $44.99 | $29.99/month |
| E*Trade | $12.99+$.015/share over 2,000 shares | $12.99+$.75/ contract | $45.00+online commission | $29.95/Month |
| Fidelity | $19.95+$.015/share over 1,000 shares | $19.95+$.75/ contract | $55.00+$.14/ share over 100 shares | Not Available |
| Quarterly/ Annual Acct. Maintenance Fees | Minimum Initial Deposit | No-Transaction Fee Mutual Funds Available | Account Closing & Transfer Fees | |
| Scottrade | $0/$0 | $500 | 1,150+ | $0 |
| Charles Schwab | $0/$0 | $1000 | 2,000+ | $50 |
| TD Ameritrade | $0/$0 | $2,000($1,000 for IRAs) | 1,300+ | $75 |
| E*Trade | $40/$160 | $1000 | 1,000+ | $60 |
| Fidelity | $0/$0 | $2,500 | 1,400+ | $0 ($50 for IRAs) |
If that was all the data needed to make the decision, I’d be all set. In the fast paced world of investing, that’s not the case though. What about research? Tools? Customer Service? These are all a bit more subjective.
According to J.D. Power, customers rank research ahead of all categories when determining overall satisfaction. Again, these things can be subjective. I went to three reputable publications and their 2008 annual surveys to see how they rated each of my five in research, as well as a few other subjects:
Research
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Customer Service
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Trading Tools
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Overall Experience
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You can spend your whole life doing research, but eventually you actually need to DO something. Choosing an online broker is different for every individual. For one person it will be all about the fees. For others, it might be the research. Yet other people will get their research from other avenues and care most about whether the company takes care of them.
Whether it’s one of these five, or any of the other online brokers out there, make sure you are choosing one for the right reasons and not because your golf buddy or the lady in the church choir uses a particular company. Just like any other investment, it has to be right for you.
Contributed by Victor Alfieri
All posts by Ben Edwards
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