Feature Comparison and Review of the Top 10 Brokerage Firms in the US

When it comes to investing your money, there are many different brokerage firms out there to help you get started. Some firms are geared toward the active, more hands-on investor who likes to be involved in every detail of where their money is placed. And there are others who will cater to the less seasoned individual who does not need to know any details, but just wants their money to be invested in the best portfolio to suit their life plans.

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In this article, we take a look at ten of the top brokerage firms in the US, and provide a little bit of insight into what makes each of them stand out. Here’s a handy comparison chart that summarizes the details:

Brokerage Comparison Fixed

E*Trade

ETRADE

Perhaps one of the best known brokerage firms is E*Trade, mostly because of their marketing campaign which included the popular E*Trade talking babies. The company was formed in 1982 under it’s original name, TradePlus. By 1994 the organization’s revenues had already reached $11 million, and with several acquisitions since that time, E*Trade has become one of the largest and best brokerage firms in the country.

One of E*Trade’s best features is their software which provides a user interface that is among the best. They offer more than 50 educational videos which offer assistance to all investors from the newest to the most experienced traders.

A recent emphasis in improving and upgrading their mobile apps is also showing many benefits. While many firms allow the user to customize their viewing experience, E*Trade has excelled in this area, winning the annual Stockbrokers.com online Broker Review award for Best Smartphone App and Best Client Dashboard two years in a row.

They also have a lot of options to offer their clients, giving them access to more than 50,000 bond issues, 92 commission free ETFs, and access to trading in 40 different foreign exchanges. This is nearly twice the average of other firms. One of their best enhancements is a real-time margin analysis tool which allows users to test the possible outcomes of a trade before they’re made.

Fidelity

Fidelity

Fidelity currently serves more than 20 million investors and manages approximately $1.8 trillion in those clients assets. Founded in 1946, the company currently employs over 41,000 people and serves people worldwide.

Fidelity currently offers 65 ETFs that can be traded commission-free as well as nearly 2000 no-fee mutual funds. They recently made some improvements to their research and tools portion of their website, which now offers 36 different savings, tax and retirement based calculators and stock research from 12 different independent firms.

One downside to using Fidelity is their high fees for certain transactions. For example, if you wanted to buy shares in a mutual fund not included in their no-fee program, they will charge you $75 to do so. And if you wanted to close a retirement account, that will cost you $50. Despite these set-backs, Fidelity earned the annual Stockbrokers.com online Broker Review award for Best iPad App and Best Retirement Services in 2013, proving Fidelity is one of the leaders in the industry when it comes to the overall user experience.

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Firstrade

Firstrade

Firstrade was created in 1985, but it wasn’t until 1997 that it really began to launch itself into the successful brokerage firm community. Today the organization has over $166 Billion in total assets under their management and offers their services to their clients at incredibly affordable prices.

Their web-based platform is easy to navigate and understand, and their mobile app is extremely functional. Clients are able to choose from over 10,000 different mutual funds to invest in, use a customizable user interface, and have diverse tools and educational options at their disposal.

While the majority of their fees are very low compared to other on-line brokers, they do charge a $26.95 fee for broker assisted transactions. Their customer service is ranked very high and they do not require a minimum deposit to open an account.

Lightspeed

Lighspeed

Lightspeed was started in 2006 and was designed for those who trade frequently and who prefer to automate their trading strategies. This company specializes in quick trades with low costs and no frills, and currently manages a total of nearly $2 billion in customer assets.

While their web-based trading program was initially basic, they have recently made some definite improvements to the UI. There are now several valuable tools available, including a real-time streaming data function allowing clients the most up-to-date information available.

One of the downsides to using Lightspeed for your brokerage needs is the $25,000 minimum required to open an account. Aside from that factor, Lightspeed continues to make improvements all the way around to better suit their client’s needs.

Merrill Edge

Merrill Edge

One of the newest brokerage firms to offer service in the United States is Merrill Edge, which was launched by Merrill Lynch in 2010 as an online discount brokerage service. Bank of America, which is their parent company, acquired Merrill Lynch during the financial crisis of 2008. In 2010, the decision was made to transfer all of Bank of America’s investment accounts to the new company and making significant changes to the customer’s management options. This was to provide a more up-to-date and streamlined experience for their clients, thus giving birth to Merrill Edge.

The company offers simple flat rate pricing, no trade minimums, and does not require a minimum balance. They also have a full range of investment choices including stocks, EFTs, bonds, annuities, and mutual funds. They also offer licensed financial solutions advisors who work one on one with clients to help identify and achieve goals. One of the biggest efforts recently has been to combine the banking and brokerage experiences by having Merrill Edge customer service representatives on hand in over 2,000 Bank of America branches.

One down side to using Merrill Edge is the fees they charge when you want to move your money out from their management, like a $30 fee to wire money and $75 to move an IRA account. Also, while they do offer stock trades for just $6.95 each, they do charge $39.95 for mutual funds not found in their list of no-fee options. And also a $44.95 fee if you need to speak with a phone representative to execute a trade.

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OptionsXpress by Charles Schwab

OptionsXpress

OptionsXpress was created in 2000 and seemed to be moving in the right direction with several acquisitions and expansions over the course of the next decade. But on March 21, 2011 Charles Schwab announced the $1 billion dollar purchase of the company, which ultimately brought both organizations many new benefits. It also backed the already growing foundation of OptionsXpress with the firm reputation of one of the largest, oldest and best known brokerage firms in the US.

Following the merger of the two companies, the integration of their clients from the OptionsXpress platform to the Schwab programming has been a difficult and slow-paced effort, but there have been significant improvements done because of it. The newer website is very easy to navigate and is visually pleasing for clients. It offers many powerful trading tools including a virtual trading platform which allows clients the ability to test different trading strategies and ideas inn real market conditions without risk. The website also offer great educational options including free instructor-led online classes, a helpful on-line community for clients to share ideas and strategies, and other valuable information. Barron’s magazine recently named their website the #1 Easiest to Use amongst all other brokerage firms today.

Another great thing that OptionsXpress is able to offer new traders is a virtual or “play” account that allows you to make trades with $25,000 in virtual cash. This allows clients the ability to “try it before they buy it” and really get a sense of the transaction process to make sure that it is a right fit for them.

Scottrade

Scottrade

With over 30 years of experience, Scottrade is another leading broker today serving their clients online or at one of their more than 500 local branches. They have the largest number of mutual funds available to their clients (over 14,500), with nearly a quarter of those being no transaction fee (NTF) mutual funds. They were recently ranked at #1 in customer satisfaction by JD Power and Associates.

Scottrade also has several other things that make it stand apart from other similar brokers. Their account set up is quick and easy, and they allow you to use an ACH deposit to transfer money to your account instantly. This feature is unique among online brokers and allows you to avoid having to wait days or even weeks before your funds appear in your account. They also have a low minimum balance required to open an account ($500) and flat rate pricing of $7.00 per online trade.

They also have award winning software making it easy to connect and view the status of your account from your home computer or mobile device. Scottrade is also great for the new investor since they offer an extensive assortment of educational tools and resources. Additionally, they do not have any hidden fees or charges for inactivity or account maintenance, as many of their competitors do.

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ShareBuilder by Capital One

ShareBuilder

ShareBuilder was founded in 1996 as an on-line brokerage firm offering its clients a variety of investment options including stocks, ETFs, options, mutual funds and more.  It expanded its services in 2005 when it began offering 401(k) plans to small businesses. In 2007, ShareBuilder  was purchased by ING Direct for $220 million, followed by Capital One’s purchase of ING and it’s subsidiaries (including ShareBuilder) in February of 2012.

ShareBuilder provides one of the easiest to use client interfaces available today, making everything from account set up to advanced trading options simple and pain free for the users. There is no minimum balance to set up an account, allowing investors the option to just invest a little bit of money if they chose to. They also allow clients the ability to customize their options as well as providing useful items like calculators and other similar research tools.

There are a few downsides to using ShareBuilder’s brokerage services, including a limited number of mutual funds to choose from, high broker fees for some transactions, and a customer service team that does not have the best reputation for being able to assist their clients.

TD Ameritrade

TDAmeritrade

Based in Omaha Nebraska, TD Ameritrade got its start in 1971 and has been serving clients successfully since that time. This brokerage giant had over 6 million funded customer accounts with client assets in excess of $530.9 billion as of May 31, 2013.

One of the best features of this brokerage firm is their easy to use format and their top-notch customer service. This firm is great for new investors because it offers a nice assortment of educational tools for the less experienced trader. Their rates are a little on the higher end but still reasonable, and they offer both online and traditional branch service.

Another benefit of TD Ameritrade is their user software which allows customers to access their account on numerous devices. Many of the options available on their site and apps can be customized to suit your needs.

TradeKing

TradeKing

TradeKing is one of the newer brokerage firms in the US, getting its start in 2005. This online brokerage service offers similar tools and services as their larger competitors at about half the cost. Ranked the #1 discount broker by the Wall Street Journal in 2007 and 2008, TradeKing also ranks high with other organizations such as Consumer Reports and Barrons. They also have one of the top rated customer service teams in the industry.

TradeKing has grown in recent years through the acquisition of several smaller brokerages, and continues to grow today. They are improving their software and implementing new changes in 2014, including adding features so that the user experience is more consistent. They also have a very active community forum which allows clients to discuss and share ideas.

While their fees may be far lower than other brokers, one thing you will need to watch out for is a $50 maintenance fee that will get charged to your account if your balance is less than $2500 and has been inactive for a year or longer.