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2012 Consumer Reports Best Discount Brokers

Another year, another Consumer Reports list [3] (unfortunately, you’ll need a subscription to read it) of the best discount brokers. It’s always fun to see this ratings just to see the different brokers jockey for positioning on these lists. I don’t think you can really take much from it, since they are usually based on reader surveys (I like Smart Money’s list because they actually go and pretend to be customers, Consumer Reports does a little of that too but not to the same extent), and everyone’s tolerance for dissatisfaction and expectations for satisfaction is different..

They broke out their ratings list into two groups, a Discount/online list and a Full-service brokerage list. The Discount/online list had nine brokerages while the Full-service list had only four. I wouldn’t consider it an exhaustive list in either category but they do capture enough of each group and these are all familiar names.

Discount/online Brokerages

The score after the name is the Reader score and I included the standard stock-trading commission as a point of reference (most expensive does not mean highest ratings). Also, a rating of 100 meant all respondents were completely satisfied, 80 means they were “very satisfied,” 60 is “fairly well satisfied,” 40 is “somewhat dissatisfied.” Finally, a difference of 4 points is not “meaningful,” which I think means is not statistically significant.

  1. USAA Brokerage Services – 93, $8.95 per trade
  2. Scottrade – 89, $7
  3. Vanguard Brokerage Services – 89, $7
  4. Charles Schwab – 84, $8.95
  5. TD Ameritrade – 83, $9.99
  6. E-Trade – 82, $9.99
  7. Fidelity Brokerage Services – 81, $7.95
  8. WellsTrade (Wells Fargo) – 74, $19.95
  9. Merrill Edge/Bank of America – 72, $6.95

I was surprised to see a few names missing off this list like TradeKing, OptionsXpress, and Sharebuilder because they’ve made other similar lists (they each made Smart Money’s list [4] last year). What’s also interesting, and you wouldn’t know this unless you had a CR subscription, is that none of the brokers fared any better than “average” on phone service (E-Trade had insufficient data while TD Ameritrade and WellsTrade came in at one notch below average).

Full-service Brokerages

This list was shorter and each had a minimum investment of at least $25,000:

  1. Edward Jones – 83
  2. Raymond James – 82
  3. Ameriprise – 80
  4. Morgan Stanley Smith Barney – 71

On the whole the ratings for the full-service brokerages were slightly lower than the discount/online brokerages, though it’d be a mistake to read into that too much.

Did you have any thoughts on any of these brokers? Experiences you want to share?