SmartMoney 2008 Broker Survey

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Smart Money reviews brokers every single year and they recently just gave a preview to their results. Rather than give the straight ranking, they discussed some headline categories (Commissions & Fees, Research, Trading Tools) and then listed the best and worst from each category.

For best commissions and fees, they listed Interactive Brokers, a brokerage firm I hadn’t heard of but does charge pretty rock bottom fees (half a cent per share on equity trades). They also showed the spread was anywhere from $4.95 for TradeKing to $112.50 for Fidelity on broker-executed trades.

For research, my Roth IRA brokerage, TD Ameritrade, took the top honors with Zecco and SoGoTrade splitting the worst place ribbon. One interesting point made was that J.D. Power’s research showed that good research trumps trade execution and customer service with regards to overall satisfaction. I found that pretty surprising since there is a wealth of free investing information out there but trade execution and customer service is where the rubber actually meets the road. If they can’t execute your trade or if you can’t get on the phone with someone in a few minutes, that’d be a deal breaker for me.

Last but not least, E*Trade and TD Ameritrade snatched the number one and one-a spot for trading tools with Sharebuilder playing caboose. It’s not surprising because Sharebuilder isn’t for the typical trader, it’s for people looking for an easy way to reinvest their dividends back into equities. TradeKing’s social networking area got a shout out as did Zecco and WellsTrade, but that was because they offered less than half the thirteen tools their researchers were looking for. Thirteen tools? Wow.

Anyway, check out the preview, I’m eagerly anticipating their results and whether TradeKing will need to update their current banner and call it a three-peat.

SmartMoney’s 2008 Broker Survey


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8 Responses to “SmartMoney 2008 Broker Survey”

  1. Dave says:

    Good find!

    As a general question (to Jim et al.)… For non-retirement investing, I have holdings in a handful of mutual funds that I’m happy about but would like to gain some experience trading stocks.. I’m fairly savvy at seeing broader opportunities and I think if I put my money out there it would motivate me to dedicate more time to learning how to become a more savvy investor…

    So .. I was wondering what’s the minimum I should consider putting in play at one of these online discount brokerages (eg. TD Ameritrade)? Is it 500? 1000? 2500? My goal in the beginning would be to break even on earnings vs. transaction fees… so $500 doesn’t seem like enough.

    Thanks for your thoughts!
    Hope everyone has a great holiday weekend
    -Dave

  2. dj says:

    No Scottrade, they use to be #1.

    Starting out you could always do something like Sharebuilder. I think ING bought them last year. Sometimes you can buy directly from the company. Checkout some place like http://www.dripadvice.com. Also checkout investment clubs or someplace like http://www.manifestinvesting.com.

  3. fred@opc says:

    Jim, nice site upgrade… like the new look.

  4. Ron White says:

    except it doesn’t fit into 1024×768 screen resolution…

  5. jim says:

    Hi Ron – I’m working on tightening things up so that it first in a 1024 resolution. Thanks!

  6. Dave says:

    thanks dj .. I’ll check it out. hope you’re all having a great long weekend

  7. Lo. Price says:

    I just read the annual broker review in SmartMoney’s latest issue. Personally, I didn’t get much out of it and was not very impressed by the research that went into the article or the information presented in it. I kind of got the feeling the SmartMoney staff considered it a comprehensive check of each broker’s customer service by calling each one of them once or sending them an email. It would have been interesting to me for them to spell out the top ways individuals use brokers these days (both full-service and discount). Obviously, different brokers appeal to different people depending on their intended use for the broker. Personally, I am a small-time investor, mainly interested in buying ETFs in regular taxed accounts. I signed up with Zecco because commissions and fees trump all else in my book, yet they didn’t even win that category in the SmartMoney survey.

  8. Kumar says:

    Information given in this survey is very good and helpful to investor @ pricing and know better about brokers. One point I would like to make is the survey should also include the pricing for the touchtone trading system, since during day while you at work, the telephone is the only means available for trading if need to. As online trading are not permitted and blocked.


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