Discount Broker Rating Summary
Discount broker ratings are offered by well-known
financial publications (Barron’s, The Street) as well as less well known online
entities. AAII no longer publishes a
comparison review of discount brokers “most frequently used” by their members. Instead
they now review each separately. If you are an AAII member, you can both access
the review and add comments.
The reviews by Barron’s, The Street, StockBroker.com,
Reviews, … are thorough and generally cover trading costs, available tools,
customer service, ease of use, and technology. A new consideration for 2015 is
the quality of the trade execution – driven by recent SEC activity.
TDAmeritrade was a consistent 2015 top choice in almost
every survey. Other overall top choices
are included here.
We provide links to all the discount broker ratings/reviews
we mention. Please remember that it is what you need from the broker, not what
the reviewer likes that really matters.
Top rated discount brokers
In alphabetical order:
- Charles Schwab Offer stock screeners, moderate
fees and local offices in many areas. Banking is available. My personal experience
with this firm is generally positive. They merged with optionsXpress and
some reviews rank both firms under the Schwab review. Reviewed by Barron’s, The
Street, StockBrokers, and InvestorJunkie. A top choice of Stock Brokers.
- E*Trade Received high marks generally
and 2 top choices most reviewers, but is geared to active traders (150 trades
per quarter). If you are not an active trader, the fees will be higher than
most of the other brokers listed here. International versions of the site are
offered. Reviewed by Barron’s, The Street, StockBrokers, Reviews and InvestorJunkie.
A top choice of Reviews and Stock Brokers.
- Fidelity Their WealthLab screener
offers back-testing as well as screening to any client with US$25,000 in assets
and who trades 120 times per year. Check to see if one of their local offices
(Investment Center) is in your area. Reviewed by Barron’s, The Street, StockBrokers,
and InvestorJunkie. A top overall choice of Stock Brokers and Inverstor Junkie.
Brokers IB is generally regarded as a top choice for international trading.
One of their claims to fame is the fact that their platform is re-labelled
and offered “as is” by about 100 other firms (e.g., PlaceTrade and
ZacksTrade). It may be possible to avoid the high minimum account size
(US$10,000) with one of the white-labelled alternatives. They also are a
major player in auto-trading. My experience with them was okay with the
exception of their customer service (not very good in my experience). Reviewed
by Barron’s, The Street, and InvestorJunkie. A top overall choice of Barron’s.
OptionsHouse This firm has gone from being ignored by reviewers (2011) to being
a top choice by Barron’s. Many of their tools are options related, but
they do offer a stock screener. Probably worth a look. Reviewed by Barron’s, The Street,
StockBrokers, and InvestorJunkie.
- Scottrade My experience with this
discount broker is generally positive. Although they offer a stock screener, it
is not much better than available free screeners. Their site seems a little
slow in some areas but their trade execution is fine and their fees are moderate.
They do have local offices if that is important to you. Reviewed by Barron’s, ConsumerSearch,
The Street, StockBrokers, and InvestorJunkie. A top overall choice of Consumer Search.
- TD Ameritrade The consistent top overall
choice when reviewers rated the discount brokers. Their ThinkorSwim platform (which
I like) is available to clients. TD Ameritrade has brick and mortar offices and
may have one near you. Reviewed by Barron’s, The Street, ConsumerSearch, StockBrokers,
and InvestorJunkie. A top overall choice of Barron’s, Consumer Search, Stock Brokers,
and Investor Junkie.
TradeKing My personal experience
with this discount broker is generally positive. Their fees are low and the site is
easy to use. Tools include a stock screener and back-testing. Reviewed by Barron’s,
The Street, ConsumerSearch, StockBrokers, and InvestorJunkie. A top choice
of Consumer Search and Investor Junkie.
Although not included in any survey or review, Folio Investing and Motif are listed here because of their unique offerings and commission structure. Note that Investor Junkie did review Motif and ranked them in the top 5.
FolioInvesting Their unique approach may have excluded them from being considered in discount broker surveys, but their fees for standard online trading are less than some in this list. Their real strength is a flat fee approach to trading if you are willing to participate in a "window" trade with others. The flat fee allows extensive diversification without prohibitive trading costs. We publish both a public folio and a private folio there and are very satisfied with their approach. One of my favorite brokers. Worth a look.
sure why this broker was ignored by everyone but InvestorJunkie. Like Folio
Investing, they offer users the ability to create portfolios (called Motifs) with
minimal funding to test strategies and/or thematic investing. At this time, we
are not yet clear about the cost of updating/rebalancing a Motif, but we are
going to try it to test a strategy that gets re-balanced quarterly. Fees could be as low as US$40 per year.
More Discount Broker Ratings
Additional discount broker ratings with recent public reviews.
Customer service is often in the eye of the beholder. Having said that, it is interesting to note there are some significant differences in customer satisfaction in the broker reviews.
Surveys are not the only way to generate discount broker ratings. An interesting review by Weiss Research considered the financial stability of the brokers. Since this is where you money will live, it may be worth considering.
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