Barron's Online Broker Ratings

Barron's Online Brokers Ratings & Broker Survey

When it comes to determining who’s who among online brokers, one of the most trusted names in providing annual reviews and rankings is Barron’s. Barron’s is a weekly newspaper devoted to the U.S. financial markets and covers anything from stocks and brokers to market trends and everything in between.

Barron’s started its long and illustrious history in 1921, when modern financial journalism founder and long time influential figure for the Dow Jones Corporation, Clarence W. Barron, determined that a weekly summary of the financial markets would benefit the American public. Barron’s is well-known for its critical assessment of stocks and other investment vehicles, as well as for investigative reporting of fraud and overvalued companies.

Barron’s aim is simple. They want to simplify what appears to be complicated. Independent analysts pore over the investment product offerings, pricing, trading platforms, and operations of the online brokers who are vying for your business. These analysts evaluate each broker and what they have to offer each trader, regardless of whether they are active or “buy and hold” investors.

Barron’s uses a very specific method to assess brokers, based on the following criteria:

• Trade Experience. Barron’s utilizes a live account and assesses what a typical trader would experience when carrying out a real time trade. Brokers that offer a smooth end to end buy or sell experience with real time information injected at the appropriate times usually score well in this category.
• Trading Technology. Brokers need more than just a slick looking order platform to score well here. Barron’s places a lot of emphasis on the availability of the interface to locate price-improvement strategies and smart order routing before awarding five star ratings here. Brokers also need to offer a vast array of market order types in order to score here. In addition, easily customizable applications designed to speed order entry are preferred to more static interfaces.
• Usability, Usability is measured in a few different ways. First, the interface must be easy to navigate. Second, the application must move freely, without bogging down or lagging between screens. Customization is always a plus and will score a broker a point here, but more importantly, uptime is a paramount.
• Range of Offerings. There is no more important factor for a broker when it comes to landing a good Barron’s rating than the investments it offers for trading. The diversity of products available for online trading are valued more heavily than those that can only be traded offline. Complex options trading, mutual fund offerings, bonds, futures, commodities and international trading all figure into the equation as well. A broker will only receive a 5 in this category if they offer all of these trading opportunities online.
• Research Features. Research features refer to the tools that the broker makes available for you to gain historical and trending information on particular investments. Barron’s evaluates the quality and ease of use of independent research, real time quotes, charting, screeners, news and much more.
• Portfolio Analysis and Reports. Barron’s places a huge emphasis on the format in which a broker makes information available to investors. Clearly laid-out reports that are topically relevant and up to date are highly valued in this ranking process.
• Help and Customer Access. Customer service is a big deal at Barron’s. Why? Because it is a big deal with investors. Brokers are evaluated based on the availability of customer service in terms of hours of availability, ease of access (online chat, telephone, email, etc.), and time on hold. Educational offerings are also evaluated in this category as giving investors the opportunity to help themselves is a hallmark sign of an effective customer service strategy. Brokers that allow face to face customer service opportunities tend to do well in this category as well as brokers that have multiple avenues for service contact.
• Costs. Last but not least, brokers are evaluated on price. This doesn’t necessarily mean that the cheapest broker scores the best. But, what is evaluated is the level of value the broker provides for the amount of commission it charges for its services. Other factors evaluated during the cost analysis include maintenance fees, additional services fees and whether or not the broker offers any commission-free opportunities.