On The Money, the personal finance show on CNBC hosted by Carmen Wong Ulrich, recently had a little web extra spotlighting Consumer Report’s list of best brokers. In their brief piece, they talked about the top three: USAA Brokerage Services, Vanguard, and Edward Jones.
USAA Brokerage Services
Unfortunately, USAA Brokerage Services is available only to USAA members, who are military personnel and their families. I know several people with USAA auto insurance and they absolutely love it (in fact, my car was totaled by someone covered by USAA and they took very good care of me!), so it’s not surprising to see them on this list. The commission on stock trades is $11.95, $5.95 if you some qualifications (25+ trades in 90 days or 16+ trades in 90 and have $50k in assets).
Vanguard, on the other hand, is available to anyone and they’re one of my favorite brokers. With vanguard, you have to select an investment type and you have two options: Vanguard mutual funds or “Stocks, bonds, ETFs, and non-Vanguard mutual funds.” With the Vanguard mutual fund account type, you get access to all their funds and you can trade them freely and for free (with some exceptions). You can’t buy stocks, bonds, ETFs, or non-Vanguard funds in the Vanguard mutual fund account type. With the stocks, bonds, ETFs, and non-Vanguard mutual fund account, you can buy anything you want but the fees are high compared to discount brokers.
Commissions: The standard Vanguard commission rate is $25 a trade, compared to $4.95 for a discount broker like TradeKing. A broker assisted trade is $40-$45, compared to $4.95 at TradeKing. The cheapest commission rate is Voyager Select, which requires $500,000 to $1M deposited, at $12 a trade.
I’m still a huge fan of Vanguard if you want access to their mutual funds, but for other brokerage options I always go with a discount broker.
I’m familiar Edward Jones but I’ve never done any business with them. I dug around the site trying to find their commission structure but gave up after ten minutes of fruitless searching. I’m sure they have it listed somewhere and unfortunately my incompetence outlasted my patience.
Unfortunately I couldn’t find the Consumer Report’s piece (the only one I uncovered was from 2007) or I’d dig up some of the other names to see how they fared. Here’s the On The Money video piece: