Online Brokerage Comparison: I Gave Up on Scottrade!
This is a guest post authored by frugal at My1stMillionAt33.
Before I tell you about my terrible experience with Scottrade, let me first compare several online brokerage firms in terms of commission costs:
- Ameritrade Izone: Best for active traders. $5 per trade, very cheap rate for option contract at $5 + $0.75 per contract.
- Scottrade: Best for casual traders and/or investors. $7 per trade. $0 for loaded mutual fund, but $17 for most other non-loaded mutual funds. Option contract at $7 + $1.25 per contract. Has offering on CD & fixed income bonds. Can only do the following option trades: buying put/call, or sell covered call.
- ETrade: More expensive compared to both Ameritrade Izone and Scottrade, unless trading more than 1500 trades per quarter.
- Sharebuilder: Good for long term investor. $4 for automatic investment, and can be as low as $1. Selling is $12 to $20 depending on the plan. The biggest downside is that you give up the control on the market timing for your buy order. Instead you will do time-averaging through automatic investment.
- BuyAndHold: Best for asset allocator and long term investor. I will recommend this to anyone who is currently using Sharebuilders. I like their $14.99 per month for unlimited number of “window” trades which get routed 3 times a day. With
$120$180 a year, you can buy and build 1000 stock portfolio if you want (just kidding, but it’s true). I don’t think you can beat this deal, especially after http://www.freetrade.com/ (under Ameritrade) is gone. - FirsTrade: Even better than Scottrade. I’m sure everyone has lamented the reduction in the NTF program for mutual funds at Scottrade. Well, if you use FirsTrade, you can get it back. Yes, ALL mutual fund trades are FREE. And the stock trades are 5 cents cheaper at $6.95. Their pricing model is essentially the same as the old Scottrade. But they don’t have any physical branches. If you want to open an account with 5 free trades, PLEASE send me (frugal) an email, and I will give you the referral code to get the free 5 trades.
Enough of cheap commissions, but if it is not reliable, it is pretty much useless. So back to my Scottrade bad experiences. My problems with them is that their internet servers are getting so unreliable, especially the first half hour right after the market opens, that it is no longer usable.
- One time I tried to day trade a stock, and I almost got sacked by Scottrade. I placed limit order, and I was barely able to cancel and modify my entry price in time because their servers kept non-responding.
- The second time, it was pretty much unforgiveable. I put in a limit order, and when I attempted to cancel the order, I simply cannot cancel it, even though it is still showing on my screen as open order. Somehow somewhere there is a server problem. Minutes later, my limit order became executable. I called up customer services, and they could not determine whether my order was filled or not. After an hour, my order got executed with a timestamp of an hour later. Scottrade claims that the timestamp is the reporting time, not the executed time, and my order was filled minutes later, instead of an hour later. Scottrade refused to correct anything, but simply blaimed everything on the delays of the market makers.
- Yesterday, again, stupid me, I was doing trades near market open. I am so certain that I cancelled my order. But I had some problem with their server again in the morning. After a couple of hours, I finally found out that my “un-cancelled” order got executed. They claimed that I never cancelled the order. They really have a big problem with this process. At the end of cancellation screen, there is never a confirmation number given out. I can never write down any # to prove that I have attempted to cancel my order. So after a long talk of repeating the same information over and over, and an eventual non-callback, it appears again that they will not do anything to my phantom trade becoming real and losing significant money in such a big down day.
I know that FirsTrade has its problems, especially with market quotes right after market starts. But at least there is never a problem with non-responding servers that give you a page-not-found error. Probably because they are smaller company. In any case, I am moving majority if not all of my money out of Scottrade. I’m so fed up with their parrot-talking customer non-service. I was planning to move my tradings to Ameritrade Izone, but after reading some comments at Dogs of the Dow, I’m a little hesitating now. If you have recent positive experience with Ameritrade or any online brokerages besides Scottrade, would you please suggest them to me? I don’t really know where I could find a reasonable priced and reliable brokerage now. I plan to use FirsTrade for now. Since I never tried their streamer, maybe FirsTrade streamer will not have quoting problem. I can always use the other online brokerage accounts for quote too, so it won’t be such a problem.
Thanks in advance for your online brokerage suggestions to me. Cheap commission is not everything. Without reliability, all (stock) bets are off. I’m planning to take my complaints to NASD. By the way, I really miss the reliability offered by Datek, which was bought by Ameritrade. That was my first reason of moving to Ameritrade since I assume that the platform would be similarly reliable. And I hope you will find both FirsTrade and BuyAndHold useful.
Print Article
Email Article
Stumble It!
Bookmark
reddit.com
Tags: Broker, ETrade, Firstrade, Scottrade, Sharebuilder, Stock Market, TD Ameritrade
| Related Posts |
Did you like this article? If so, you can get all the latest articles delivered to your email inbox for free each morning by entering your email address in the box below. Your email will only be used to deliver this once-daily subscription and you can unsubscribe at any time.
There are 27 comments, add your thoughts now!
From what I’ve read, despite the technical problems, Scottrade is still your best bet overall. All of these applications are going to get bogged down during high-volume times. The same can be said for popular websites and poker applications. High-volume causes the systems to slow.
From Scottrade’s point-of-view, it probably isn’t worth the upgrades to provide the seamless service, considering their servers are probably maxed a small fraction of the operation time. Then again, I’ve never used any of these yet. (no money)
Good blog btw!
I’ve been trading since 1996 and I’ve used several brokers, starting with Kennedy & Cabot to Etrade.
I have to say that the top two has been Schwab and Etrade, with Etrade getting the nod. I’ve never had an account with Scottrade so I don’t have any experiences with them. Like you, I value dependability rather than price. I chose Etrade for the fast conformations and clearity of the website design. Not to mention the reliability which is incredible. I have never had a problem with Etrade and I have been with them for 2 - 3 years now.
My biggest problem with Scottrade was fund availability. After selling a MF, funds would take days to clear before being able to buy from another MF family. Depsoiting funds by check also caused a significant delay in fund availabilty. I currently use E*Trade adn accept the higher costs in exchange for ability to download to Quicken, quick fund availability, and research.
anybody tried sogo invest or tradeking ? they are the latest entrants in discount brokerages
I can’t say I do a lot of daytrading-style-trading, but I’ve had pretty good performance luck with Ameritrade in general.
I don’t think there’s any excuse for latency or downtime in these scenarios - low-latency bandwidth is cheap, and so are racks and racks of dual xeons. It’s just a matter of making your app more scalable, then scaling it. Boils down to incompetant coders, or cheapskate network management.
It can be done - after all, you don’t see the NYSE’s systems getting bogged down, do you?
Denon, I stand corrected! That’s what I get for always being on the hardware side … I didn’t even think of application side and scalability issues from that perspective.
No matter where you go, there will always be that inverse relationship between price and service. Before you make the same mistake again, decide upon which aspects you can live with, or without.
I have been using VBS since it was first offered. Of course, it’s more expensive, but they provide great customer service and fix any problems they have caused. Like you, I went the Scottrade route.. and experienced similar problems before also closing my account with them. I would never recommend Scottrade, at any price.
Perhaps I’m cynical but it sounds like you are recommending firstrade so you get free trades. I’ve had my roth ira at scottrade for years and have always had a great experience. They answer emails within an hour and you can always get someone on the phone.
Hi, I’m Kevin Dodson, Manager of Online Trading Platforms at Scottrade. I saw your blog and I thought that I might be able to provide you and your readers with some helpful information. Scottrade values its customers and constantly strives to provide award-winning customer service. Frugal’s experience is atypical for Scottrade customers, and Scottrade takes customer feedback seriously. Whenever customers have unresolved issues, they are encouraged to contact their local branch office to assist them.
Our licensed branch managers and brokers are well-trained and customer contact is regularly monitored to ensure that customers receive exceptional customer service. If you have any questions or issues with Scottrade, we encourage you to e-mail support@scottrade.com or call 1-800-619-SAVE.
As part of our mission to provide outstanding customer service, Scottrade is reaching out to customers and potential customers on the Web. I hope you and your readers found this information useful. Please contact Scottrade for more assistance..
Sincerely,
Kevin Dodson
Manager of Online Trading Platforms
Hi,
I have accounts with both Izone and Scottrade (use either half the time). I had a similar experience as Frugal with Scottrade 2 months back (dec 2006) - I needed to sell off 20 aapl like a hour before closing. I had used the sell option, reviewed the price, then got a phone call for around 2 minutes. When I got back, I again refreshed the screen to see the latest price - my MISTAKE. The screen went back to the default “buy option”, I ended up buying 20 aapl instead of selling. Immediately noticed this in the review screen and cancelled the transaction, but of course it was a no-go, the trade had already gone through. I talked to my local agent office within 3 minutes of this, but they did not help as they said that the transaction had already gone through and it was near closing time and they can do nothing!!
So, now I am pretty careful, I do not use Scottrade as much as I used to - the commision’s anyway more, shifted some cash and stocks to Izone. One thing, I have not faced this situation with Izone yet and am pretty careful reviewing my trades. But someone do let me know if you have faced similar situation with izone.
Cheers,
Sri
> Frugal’s experience is atypical for Scottrade customers, and Scottrade takes customer feedback seriously.
Despite what Kevin Dobson writes, I have had the same experience. I really like Scottrade’s interface, but I’ve had the same issues with trades not cancelling when they were supposed to. The problem is that their software does not confirm executions properly.
I met the same things as you with scottrade,it is stupid.
Is it possible that orders was not canceled because of a firewall? That happened to me once on IB account. Which is, as far as I know, the best platform, I have IB and Firstrade
Same deal with Scottrade, only when its peak time to trade - yes day trade - at least 3 times i have been locked on a page and not able to order - watching my trade slip out of my hands . Have to move somewhere ( happened today for the last time) thats why im here.
Hi, I’m Elmer Wagner and my email is namonsa@yahoo.com. I noticed and anomaly while trading and called the broker. The local manager did not seem concerned, but I said in good faith I must report it to the SEC. The broker took offense to my action and wrote me a letter that our relationship had changed and that I could only sell my stocks. Essentially the broker said that I was not welcome. However, I did not agree with his methods and sent a counter proposal, saying essentially set a date to terminate the account and those stocks not sold can be delivered in certificates. The broker did not respond and when I realized he had not intention of being reasonable. I took other actions. We are currently stalemated. Meanwhile, I have contacted State and Federal Government Offices and have begun a campaign to stop this unethical broker action. You have a right to your property and a broker cannot hold in without good cause. It’s very unethical. Write me if you had a similar experience. Oh! The broker? Write me and I’ll share more with you.
Hi,
I’m Elmer Wagner and I apologize for the typo in my last entry on Oct. 6, 2007 . My email address should read namonsa @yahoo.com.
Thanks for your understanding
Ditto here on Scottrade, which if anything is getting worse, I can’t remember how many months now it has been impossible to even login to my scottrade accounts in the first 20-30 minutes after the market opens.
Ditto what others are saying about Scottrade! I’ve used ScottradeElite for as long as it’s been out, kudos that they try to add features however, they tend to have problems, at times screens don’t update, execution windows freeze and you have to exit and re-open the platform to see what’s happening. I have emailed the support@scottrade.com and I get no concern or action. They tell me to call my firewall software provider so I can determine how to changes a cryptic port #. Right, that’s something the average person would feel confortable doing…
Regarding the fund clearing issue I still am amazed it takes 2 days for funds to clear. Are they parking monies in bank accounts to offset lower transaction fees? With todays techonology 2 days makes little sense.
Whats the best online trading platform wrt commisions, fund clearing time, and trading features?
ScotTrade was down for hours today. And today was an especially horrible experience. Normally I just call my broker when I want to place trades and the site is down. My broker gives me the $7 rate understanding that the site is down. No problem. But today I wanted to place an after hours trade. After all, some bad news had just come out about my stock and I felt like the price was going to tank. It was time to sell. Finding the site down, I called my local office, but it was closed. I was transferred to some national call center where I was connected with a broker. THE BROKER TOLD ME THAT THEY CAN NOT PROCESS AH TRADES!!! I could do nothing but sit there and watch my stock drop in price and watch my profits fall. I immediately hung up the phone and called E*Trade. I’m switching my accounts over right away. The commissions are much higher, but it’s well worth it for the reliability. E*Trade’s servers do not crash, not even during last week’s very heavy volume when both ScotTrade and AmeriTrade were both down.
I can’t enter order online with Scottrade on 4/1/08 half hour before market open and again I can’t even login my account online with Scottrade on 4/2/08 half hour before market open.
I read the comments from Kevin Dodson and almost busted a gut.
Scottrade is the most unreliable, slow online platform I have used. When you call them they shrug and say that it’s not their fault. This is based on experience over the last few years that has caused me and most of my sophisticated investor friends to leave them.
They clearly do not value their customers or they would have resolved their online issues several years ago when Mr. Dodson left us his note (further up in the thread) with nice sentiments but a complete lack of reality.
Scottrade has cost me atleast $3000 bucks in slip ups, just like the guys above the order hangs there, you cannot cancel it or modify it, worse still is when i called their office they couldn’t resolve it. other times I sent an order to sell i got the confirmation number but the trade never got executed..? they told me there was a hiccup with the connection. I day trade so I give them at least a $150.00 a week for commissions, I found out for that kind of money I cant trade with the best platforms like tradestation or optionxpress. Scottrade is best for the casual investor, these are the same people who vote them number 1 in customer satisfaction every year. I suggest Izone, Optionxpress or tradestation for the active trader.
I’ve been using Scottrade for a while and I really like their live ticker and trading system.
Use this code: SLHN6967 for 7 FREE TRADES when you sign up for Scottrade! Only 3 free trades after 10/31/2008.
I deposited an additional $7,000 in my etrade account yesterday morning. They told me the funds wouldn’t be available for 4 days. Today, they notified me that my funds would not be available for trading or withdrawal for another 9 days! Apparently holding customer funds hostage and making money off the float is part of their revenue strategy. Scotttrade here I come.
FREE TRADES (Save at least $70 in trading fees). Promotional code for Scottrade: Use referral code XYRM9330 to get 7 free trades when you open an account. You can then refer additional people and continue getting free trades.
There should be a class action lawsuit initiated against Scottrade for not allowing their customers to cancel a sell order online for a stock that has halted trading for a few hours. I had complained verbally with no sympathy and then through FINRA and Scottrade refused mediation. They apparantly are not very interested in good customer service or improving their online problems.
A3GR – I am the Online Public Relations Specialist for Scottrade. I am sorry to hear that you are unhappy with Scottrade. I would like to look into this matter further. Please e-mail me at mediarelations (at) scottrade (dot) com. Thank you, Amber Talbot – Scottrade Public Relations
Previous Article: « 5 Ways To Save On Transportation
Next Article: Debt Pay Down FIRST »