Online Discount Brokers: SmartMoney Broker Survey

by Silicon Valley Blogger on 2009-05-2212

In this article, we cover some broker promotions and the SmartMoney Survey for online discount brokerages.

Online Discount Brokers

The Smart Money Broker Survey is a great way to find out just how well our favorite brokers have been doing over the past year. Do you know who topped the list for Best Online Brokerage this year? It was ETrade yet again for the third time in a row (Smart Money ranked them #1 in 2007 and 2008 as well)! Great job on hanging on to this award for another year.

For a quick look at who were the best online brokers and the worst ones among the bunch, here’s the list (ranked by scores taken on various categories):

Discount Brokers In SmartMoney’s Broker Survey

Broker Commission Investment Products Banking Services Trading Tools Research Customer Service
ETrade $9.99 4 stars 5 stars 5 stars 5 stars 5 stars
Fidelity $7.95 5 stars 5 stars 5 stars 5 stars 4 stars
Charles Schwab $8.95 5 stars 4 stars 3 stars 5 stars 5 stars
TradeKing $4.95 3 stars 2 stars 5 stars 3 stars 5 stars
TD Ameritrade $9.99 5 stars 2 stars 5 stars 4 stars 3 stars
Muriel Siebert $14.95 3 stars 3 stars 5 stars 3 stars 5 stars
Scottrade $7.00 4 stars 1 star 4 stars 3 stars 4 stars
Firstrade $6.95 4 stars 3 stars 3 stars 2 stars 3 stars
OptionsXpress $8.95 3 stars 2 stars 5 stars 3 stars 2 stars
Merrill Edge
(Bank of America)
$6.95 4 stars 4 stars 4 stars 3 stars 2 stars
Just2Trade $2.50 2 stars 2 stars 4 stars 3 stars 2 stars
WellsTrade $19.95 3 stars 5 stars 1 star 4 stars 3 stars
ShareBuilder $9.95 2 stars 3 stars 1 star 1 star 3 stars
WallStreet*E (defunct) $9.99 4 stars 3 stars 3 star 1 star 1 star
Zecco Trading $4.95 2 stars 1 star 2 stars 1 star 3 stars
SogoTrade $3.00 1 star 1 star 2 stars 1 star 2 stars

The Best and Worst Discount Brokers By Investment Category

Survey Category Best Worst
Commissions & Fees Just2Trade beats out Zecco this year. WellsTrade
Investment Products & Mutual Funds Fidelity carries more than 16,000 mutual funds, mostly no-load. SogoTrade has no mutual funds at all! Well, they cater to active traders.
Customer Service Muriel Siebert edges out TradeKing this year. WallStreet*E
Trading Tools TD Ameritrade ShareBuilder
Banking Services ETrade, Fidelity, WellsTrade SogoTrade and Scottrade
Investment Research ETrade and Charles Schwab WallStreet*E, now defunct.

Broker Promotions

A couple of top discount brokers are running some great promotions at this time, which I thought I should mention. Here are some details:

  • optionsXpress is offering a $100 cash bonus for new customers who open an account with them. They’ll deposit $100 in your account once you fund your account with $500 and execute at least 3 trades within the next year. You’ll receive the bonus within one month of meeting the terms and conditions of the offer. Also, you’ll pay NO transfer fees by switching to optionsXpress. Here’s where to sign up.
  • OptionsHouse will give 100 free stock trades if you open a new account. OptionsHouse has one of the cheapest flat commission rates around: they charge only $3.95 a trade. They will also reimburse your transfer fees up to $100. Here’s where to sign up.
  • TradeKing was, for a limited time, offering a $50 cash bonus for those opening new accounts. While this promotion was in effect, customers were eligible to receive $50 after they deposit $2,500 in their new account and make their first trade. However, this cash bonus promotion has already expired. Nevertheless, there are other great offers from TradeKing which include a referral fee of $50 for any new investor you refer to them, along with reimbursement of your transfer fees up to $150. Here’s where to sign up.

All offers are only good for a limited time.

Broker Reviews

We’ve also covered more ground on some of them: do check out our reviews on Scottrade, ETrade, TradeKing, OptionsHouse and Zecco for additional information and our thoughts on these sites.

Well, this stuff is pretty eye-opening, in the sense that a lot has happened over the last year that merit giving these brokers a second look to see which ones you should consider doing business with (or which ones to switch to/stay away from). In general though, I believe these companies have fared relatively well, even during tougher times in the financial industry.

For more on the broker survey, check out this link.

Copyright © 2009 The Digerati Life. All Rights Reserved.

{ 12 comments… read them below or add one }

Chris May 23, 2009 at 9:20 am

I have several e-trade accounts due to stock options and ESPP plans. Their site workd pretty darn good. The commissions are misleading though as I pay 19.99 for my trades. Probably because I do not have a big enough account. As for financial stability, I wouldn’t put them up there as the most stable. They had to take a big investment from Citadel (a huge hedge fund) to stay in business as they got caught up in the sub-prime debacle.

I have always been a big fan of Fidelity. I have some 401K money there and my mother has her accounts there as well. Service has been great but then again, I also think it all depends on your representative regardless of what company you are with.

Eventually TD Ameritrade (in my opinion) will get swallowed up by Toronto Dominion (there majority shareholder) but I don’t think that will be a bad thing. TD is an extremely well run bank.

Robbie May 23, 2009 at 11:16 am

Thats an interesting status i was not expecting that, some commissions can be misleading however, thanks for the links it will help me and my TRAVELHQR crowd out.

Stanley May 26, 2009 at 11:45 am

Ameritrade is my choice, not quite the cheapest but the service and execution are second to none. Plus they have great live help.

Bret June 1, 2009 at 12:47 pm

I have been using E-Trade, ever since they swallowed up my account at Brown & Co.

I have been very happy with their rates, research and trade execution.

I don’t use their banking, but I did just buy 500 shares of their stock.

Silicon Valley Blogger June 1, 2009 at 5:19 pm

To be honest, from all the research I’ve done and brokers I’ve reviewed (few more are on the way actually), my favorite so far have been ETrade and TradeKing. They have these few things in common:

1. Well awarded, good reputation
2. Decent transaction fees, commission rates
3. Good customer service
4. Great tools/resources/knowledge center
5. Good site usability

There are other brokers that may fit your needs for one specific reason or another — perhaps options trading is better supported at OptionsXpress or OptionsHouse and cheap stock accumulation would be better served with ShareBuilder. Zecco may still work out for active traders because of the free trading feature. But overall, I like ETrade and TradeKing, but that’s me.

Mandy November 3, 2009 at 5:22 pm

While I really like my broker to be cheap, my favorite one is still Scottrade, because it has a lot of tools for those who are just learning to invest. I can’t say enough about them.

Jeremy December 14, 2009 at 11:24 am

I think SOGOTRADE is pretty good. It only cost $3 to make a trade (unlimited shares). They have good online and phone support, quick execution and a good inventory of shares that you can short! Oh and you only need $500 to open your account. You also get 100 free trades when you open your account. Can’t beat that.

Silicon Valley Blogger December 14, 2009 at 3:02 pm

Not sure I’d buy into SOGOTRADE. The only thing going for them looks to be their pricing. But they are not rated that well in the broker survey above. Their investing and banking products and services, as well as their research materials have been given the lowest scores.

Paul Moore December 27, 2009 at 4:10 pm

Amazing, no mention of Interactive Brokers. Probably , the best, IMO

Jeevan from Agents January 25, 2010 at 12:29 pm

Fidelity all the way. Price is higher but it’s worth it for the customer satisfaction. New investors got all the tools they need to learn, buy and invest.

Tom March 20, 2012 at 2:05 pm

OptionsExpress is no longer at $3.95 per trade. Now owned by Schwab, it looks like $8.95 for stocks. I don’t see anything about 100 free trades either. Better update your site, promotions and links.

Silicon Valley Blogger March 20, 2012 at 7:05 pm

The information here is up to date. The offer for 100 free trades is in place for such brokers like OptionsHouse if you use the links we provide. Are you mixing this up with OptionsXpress’ promotion for $100 for new accounts? Thanks for your observations and comment.

Leave a Comment