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BVC #24 – How to Pick A Stock Broker [VIDEO]

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Every week or two, I get an email from a reader wanting to know who I think is the best stock broker. I usually tell them that when it comes to my retirement, I use Vanguard because I like their mutual funds and because I can invest in those mutual funds for free. For my taxable broker, I use E*Trade and TradeKing. E*Trade because they had a high yield savings account that I could use as my sweep account (not anymore though) and now TradeKing because trades cost $4.95 and they consistently win awards for customer service (though I’ve yet to call them, never had a reason to).

In my emails, I don’t go through the methodology I used to picking a broker because I had planned on making a post about it. I only talk about the brokers I use and why (like in the above paragraph). So, I decided to make it the subject of the latest Bargaineering VideoCast.

In the end, it comes down to figuring out what you need from a broker and selecting one that meets it. For me, the issue is of price and fees. I’m less interested with the scope of research, so full service shops with access to dozens of analyst reports don’t appeal to me, and more interested with ensuring the only fee I pay is for trading stocks.

Are there important criteria that I missed? Please let me know in the comments!

And a big thanks to Intuit and TurboTax for supporting Bargaineering and sponsoring this video. If you’re on Twitter, I invite you to follow @TurboTax for more information on tax and product news straight from the experts.

{ 11 comments, please add your thoughts now! }

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11 Responses to “BVC #24 – How to Pick A Stock Broker [VIDEO]”

  1. Jim:

    I think another criteria to be considered is support. Not just support in making trades but things such as education and information. When I looked for a broker I landed on TDAmeritrade. They were a little more expensive for each trade but if you are not daytrading the depth of training a support was huge when I was just starting.

  2. I just go by the lowest trade prices, as long as the trades execute quickly.

    John DeFlumeri Jr

  3. javier says:

    Hi Jim,

    I look for cheap fees and a decent customer service. I hate talking to machines on the phone, so I only open accounts in companies where a real person will pick up the phone when I ring them.

    Cheers!

  4. Edwin says:

    Speed of execution can be very important if you like to trade often because trades can be very time sensitive. For someone like me though, the cost of doing business with them over time is the most important factor which includes any maintenance / inactivity fees along with the costs of each trade.

  5. Mrs. Money says:

    I work at a bank, and we have someone licensed there to sell investments. She tells clients if they are happy with their broker to stay with them. I love that advice!

  6. Jeff says:

    You know, the “stockbroker” as we know him is all but gone.

    Now, every professional wants to be an advisor, and every client seems to agree that a deeper-reaching relationship is due between the client and the professional.

    Of course, we could get into the method of compensation and so forth, but generally the folks with the money want more than a “buy” and a “sell” and a pat on the back. They want investment planning, tax planning, estate planning, insurance planning, etc….

    I welcome the change.

    Jeff

  7. zapeta says:

    I enjoyed the video, thank you for the helpful information! This was very timely as I’m considering opening a brokerage account in the near future.

  8. Austin says:

    I’ve used Zecco for a little over a year and I’ve been happy with them for buy and hold investing.

    They changed from free trades to $4.50/trade if your account is under $25k but it’s still a solid deal.

    I also use Vanguard for my Roth and I couldn’t be happier. I wish there minimums weren’t so high, but if that’s what they have to do then so be it.

    Great video, Jim.

    -Austin

  9. Chris says:

    Good video. Who has the lowest price live trades?

  10. eric says:

    Price and reliability top my list.

  11. FlyFisher says:

    Price is key. Free trade promos constantly run by ING helped me make my decision. I think I currently have four free real time trades and 15 free automatic investments just waiting to be used… Having it so simply linked to my ING savings is also a big plus


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