Etrade Brokers

Milos asked:


Based in Morris County, New Jersey, The Daily Record reviews the best brokerage firms around the brokerage world. It quotes Smart Money Magazine’s latest survey which placed Fidelity as “Premium Broker”, TradeKing as “Best Discount Broker”, and Merrill Lynch as “Best Full-Service Broker”.

Yet, the Daily Record newsroom, headed by Warren Boroson, responded that the survey of these three best brokerage firms may not be sufficient enough for brokerage trackers since it is not suitable for day-traders or those who buy only mutual funds. Accordingly, Smart Money’s survey and rankings are based only on buy-and-hold customers who are into stocks, bonds and mutual funds, those with a $50,000 account, and those who want to write covered calls.

Nevertheless, the ranking of the best brokerage firms by Smart Money has still been based according to set quantifiable and qualitative criteria. To determine the best brokerage firms, Smart Money sent their reliable field reporters to open brokerage accounts in 14 potential brokerage firms. The reporters bought and sold different kinds of securities, questioned the firms’ customer service through phone and e-mail, checked their account statements and tax forms, and reviewed scrutiny on the web sites, as among some of the survey’s conducted measures.

To note, the Smart Money study also included supplementary standards to further determine the best brokerage firms more accurately or to come up with the best possible approximation through their available means. They included the brokerage firms’ size of commission, investment products, banking amenities, trading tools, level of research, and customer service.

And the results Fidelity, TradeKing, and Merrill Lynch as the three #1’s. Next to Fidelity in the honor as “Premium Broker” are E*Trade, Charles Schwab, Banc of America Investment Services, TD Ameritrade, WellsTrade, and Vanguard. Vanguard, as explained by Smart Money came last because it caters to fund-investors instead of stock-investors.

TradeKing grabbed “Best Discount Broker” although it is only a new-entry discount broker. Following the lead are Firstrade, OptionsXpress, Muriel Siebert, Scottrade, ThinkOrSwim, and WallStreet*E.

In the “Best FullService Broker”, Merrill Lynch is tagged-along by SmithBarney, Edward Jones, A.G. Edwards, Wachovia, Morgan Stanley, and UBS. Merrill Lynch replaced last year’s first-place Edward Jones because of the latter’s below-average stockpicking. Other special determinants used by Smart Money for their “Best FullService Broker” aside from the brokerage firm’s stock-picking are customer satisfaction and trust and statements.

Overall, the Daily Record recognizes Smart Money’s survey of the best brokerage firms. These may serve as good guide for people engaged or deciding to engage in brokerage, and also as good guiding-principle for self-company assessment of the forerunning brokers themselves. The outcomes of the study at least are good only for this year’06 Just for the record.



Gary

William Smith asked:


Everybody knows the big online brokerages - Ameritrade, E-Trade, Charles Schwab, and Fidelity. Those in the know are familiar with the hot new online brokerage, OptionsXpress. And of course, there are the super-low cost online brokerages like FirstTrade, ScottTrade, and Sharebuilder.

But were you aware that there were many more online brokerages, and that some of them rated higher than their more famous counterparts in a recent study?

Online Brokerages - Some You Might Have Missed

One online brokerage you’re probably not familiar with is thinkorswim Webtrader. Despite it’s funny name, thinkorswim is an online brokerage that delivers serious service, or at least, that’s what Barron’s says.

Thinkorswim’s Webtrader platform ranked second, only to OptionsXpress, among the 14 most popular online brokerages in Barron’s most recent annual survey.

Another online brokerage you might not know is Muriel Siebert & Co. Muriel Siebert, the person, was one of the first women to become a big-time broker on Wall Street, and instead of retiring, she went on to found her own online brokerage.

Muriel Siebert & Co. ranked the highest of all 14 online brokerages in customer portfolio analysis and reports. This means that the company does a great job providing well-laid-out reports, updated in real-time, showing you your current balances and positions - definitely something to think about when selecting an online brokerage.

You know Ameritrade, but have you heard of Ameritrade Apex? It’s a special brokerage for premium accounts. E-Trade also has a premium brokerage called E-Trade Serious Investor.

Some of the lesser known online brokerages that you would be better off to avoid include Wall Street Electronics and Trade King. Each of these unknowns ranked in the bottom half of Barron’s survey.

Beyond the Web Browser

Serious, full-time traders tend to prefer software platforms over the more basic web-browser-based ones. With a software-based online brokerage, you install a program on your computer that has enhanced features and connectivity to the internet. Typically, these programs have a lot of charting capabilities that the browser-based online brokerages do not.

In Barron’s most recent annual survey, there was a tie for first-place among the software-based online brokerages. MB Trading and thinkorswim each scored 36.2 out of a possible 50.

MB trading was strongest in trade technology (advanced order routing strategies for big volume traders), trade execution (finding the best bid and ask prices), and costs. Thinkorswim fared best in research, customer portfolio analysis and reports, and customer service.

Other software-based online brokerages include TradeStation, Interactive Brokers, Terra Nova Trading, RushTrade, and ChoiceTrade. Some of the ones you might want to avoid are Fidelity Active Trader, Preferred Trade, CyberTrader, and E-Trade Power.

The worst of the bunch are ScottTrade Elite and AB Watley, which were particularly bad in trade technology and customer service, respectively.

Don’t Forget About OptionsXpress

OptionsXpress has been making a lot of noise lately, but it still isn’t nearly as well-known as Ameritrade and E-Trade. For that reason, it’s probably prudent to take a closer look.

In 2006, OptionsXpress was recognized by Barron’s as the top browser-based online brokerage - for the fourth consecutive year. It rated a 4.7 in trade execution, 4.1 in usability, 4.3 in offerings (stocks, options, mutual funds, etc.), 4.8 in research, 4.7 in customer portfolio analysis and reports, 4.4 in customer service, and 4.0 in costs.

The only category in which OptionsXpress didn’t do well was trade technology (3.8).

Although OptionsXpress charges $13.95 per trade, versus $7-10 with other online brokerages, you get what you pay for. Amertirade, for example, charges an additional $9.95 per month for real-time streaming quotes.

OptionsXpress gives you the quotes for free. It can be amazingly frustrating to try to buy a stock on Ameritrade and not even know what the stock is selling for at that very moment.

The good news is that you’re not limited to using one online brokerage. Most allow you to open an account with as little as $1,000 (or less). There are no fees associated with opening an account, checking it out, and then switching if you’re not satisfied.

So with that in mind, don’t limit your choices - go out there and find the online brokerage that’s right for you!



Jon