On Zecco’s Poor Customer Service

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Smart Money named Zecco the worst in customer service in their 2008 Smart Money Best Broker Survey and many of the comments on my Is Zecco A Scam? post seem to echo the experiences of Smart Money’s reviewers. If you read the comments, they range from “Eh, you get what you pay for, it’s not bad.” to “Zecco sucks and Zecco is only for non-serious amateur traders arguing over couple of bucks here and there.” (Lee)

I said I’d fund my account there but I never did. One reason was because I was confused by the two separate logins, one for the community and one for my brokerage account. Then, the comments about the poor customer service starting rolling in and Zecco changed from free trades to 10 free trades if you had over $2,500 in your account, so I decided it wasn’t worth the trouble. The reality is that I opened a high yield savings account and brokerage at E*Trade ($9.99/trade) and then a TradeKing account ($4.95/trade) to write a review of TradeKing. With two brokerage accounts plus my retirement accounts, I figured another one with reported bad customer service wasn’t worth it (especially if I’m trying to simplify my personal finances! I’m going the wrong way!).

In truth, I think that people expect too much from Zecco. While the change in free trades to 10 free trades with a minimum balance was a bit “bait and switch”-y, you’re still getting ten free trades worth at least $50 a month (assuming 10 trades at $4.95 each at competitor TradeKing). But the maxim of “You get what you pay for” still rings true. If you want better customer service, pay the $4.95 a trade (or more); if you don’t care about customer service, then Zecco might be right for you.

On the other hand, should you be trading ten times a month? Most people shouldn’t be trading ten times a month, so your actual total benefit isn’t $50 a month, it’s less. In fact, I haven’t made a stock trade in several months (not that I’m the poster child for a disciplined investor). If you’re more a mutual fund type, you can trade those for free if you open an account at that brokerage. At Vanguard, you can invest in many of their no-load funds without any transaction costs whatsoever. Free trades at Vanguard!

So your trade-off of poor customer service is for a couple of trades a year, which is not worth it in my opinion. And that’s why I never funded my account.

{ 10 comments, please add your thoughts now! }

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10 Responses to “On Zecco’s Poor Customer Service”

  1. No – a disciplined long term investor should not be trading 10 times per month. For no cost or low stock trading, don’t overlook your bank. My bank has a brokerage division and because I have a good relationship with them on the deposit side (I run all of my incoming cash and debit card transactions through them), I get free stock trades. You definitely should check that out with your own bank.

  2. jim says:

    I know Bank of America recently started offering free trades too. To be honest, I am avoiding the “free broker trades” game because I don’t want to be tempted into playing the stock market. Right now I just put money into a Vanguard account and go the “smart” route.

  3. aa says:

    You can play long-term all you want with mutual funds and Vanguard. But you can also play short-term and pick stocks with Zecco.

    At Zecco, everyone can afford to use dollar cost averaging with 10 ETFs/stocks.

  4. Ben says:

    I have been using Zecco since Febuary ’08. When I opened an account I needed help and got a response to my email within a day. That response time was just fine with me. It falls short a bit on the tools though (monthly fee for this) but marketwatch and other finance sites are fine.

    I’ve been buying ETFs for the long term and don’t really intend to sell ever if I can help it.

    Because of Zecco my cost basis is 26 basis points for a full portfolio compaired to a cost basis of 40-50 with Vanguard.

    Anyway, my vote is for Zecco. . .


  5. Matt says:

    Zecco is perfect if you’re an inactive investor who has experience dealing w/ online investing sites. However, if you’re novice investor who requires some hand holding (the type of people Zecco erroneously attracts), or an active trader you will be sorely disappointed.

    However, Vanguard is still my personal favorite for those who choose to buy low cost index funds b/c it’s so easy to setup automatic investment plans. Remember, these automatic transactions are free of charge (just like Zecco) if you have an account at Vanguard and buy their funds, which have always been top performers.

    If you’re an active investor, avoid Zecco at all costs and use Interactive Brokers, Etrade, or other low cost provider.

  6. The thing that really makes me stay with sharebuilder is that I could reinvest my dividends automatically into fractional shares.

  7. Erin says:

    I’m a Zecco user, and I have no trouble with customer service. I haven’t had any emergencies, so I just send an email and they get back to me. Contrary to some of the other comments, I think Zecco is really good for people who are new to investing and don’t have a ton of money in the stock market. If you’re making small trades, you want small to zero commission costs.

  8. jackie says:


  9. dd says:

    Zecco is really a garbage. I totally agree. I’ve been dealing with them for transfering money back to my linked account. They did not have any response. They eat my money. Bad bad company. I am totally against this company. Go to find a good company. Avoid this garbage one.

  10. BSC says:

    It took Zecco about a year or two to flesh out their website and the integration with Penson, which is their clearing house. Initially the website didn’t make a lot of procedural things as clear as it should have been, like an account holder must send in their W-9. So some customers who were new to trading experienced problems such as IRS withholding. There were also problems with their servers being overloaded. But as of June 2009, they’ve fixed the majority of their problems. I’ve had an account on Zecco since they opened in 2006 and I’ve been very happy with it. I have over 25k in my account and since I’m a long term wealth builder, 10 trades per month is usually enough for me. I hold a lot of dividend stocks and ETFs, and having free trades make it easy to reinvest these smallish payouts on a monthly basis. Their customer service has been easy to reach, I go through like one automated phone prompt and I can reach a real person. However, if they ever take it to something like 5 free trades per month I would seriously consider moving my assets out.

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