What do you want from your brokerage firm? Sorry, they can’t make the market march back to its old highs. But what about commissions, research, investment products and customer service?
To find the best – and worst – discount brokers in these and other categories, our 17th annual broker survey relied on our own tests, consulting-firm analysis and surveys of the brokerages themselves. No detail was too small. We noticed, for example, that WellsTrade and Banc of America charge $75 to close a retirement account – a service provided for free by some of their competitors. OptionsXpress left us on hold for nearly four minutes when we requested its interest rate on cash balances. (The company later said it shouldn’t have taken that long.) But when we contacted Fidelity with a query on interest rates, the rep gave us a quick answer and even a compliment: “Good question.”
Yes, it’s a lot of work, but our efforts haven’t gone unnoticed. For two years now, the Web site ConsumerSearch has said SmartMoney has the best broker survey among magazines and newspapers. Our category-by-category-findings:
Commissions & Fees
The winner in this category, Just2Trade, is new to our survey this year. Launched in 2007 and geared toward experienced investors, the firm took top honors with the price of $2.50 for both equity and mutual fund trades. It also boasted some of the lowest rates on margin interest. Just2Trade edged out Zecco, which got its start just a few years ago by pitching 40 free trades each month to any customer holding a $2,500 balance. Zecco has angered some customers by lowering the number of free trades to 10 and increasing the required balance to $25,000. Fall short and the cost is $4.50 a trade. The firm also set new fees for paper statements and trade confirmations. “It’s a recession,” says Gabriel Dalporto, Zecco’s chief strategy officer. “Our margins are down.”
WellsTrade, the discount-brokerage unit of Wells Fargo, doles out up to 100 free trades a year. But it rounds out the bottom of this category because customers qualify only if they link their brokerage account to a Wells Fargo bank account. Without that link and $25,000 in combined assets, commissions start at a pricey $19.95 and run as high as $60 for some broker-assisted trades.
2009 Copyright The New York Times Syndicate