In the most recent edition of SmartMoney’s annual broker survey, SmartMoney noticed commissions continue to get cheaper as a the average basic stock trade is $8.27. Down 2% from last year.
Below is the breakdown summary from the 2011 broker survey.
Commissions and Fees
- Best: ShareBuilder
- Worst: optionsXpress
“Experts say many brokers are making up the revenue with more fees for common services, such as transferring balances or closing an account. Indeed, recent fee increases outnumbered decreases by more than two to one. “The nuisance fees aren’t going away,” says James McGovern, a vice president at Corporate Insight, a financial-services consulting firm.”
Customer Servce
- Best: TradeKing
- Worst: ShareBuilder
Not coincidentally the best ranked brokerage for commissions and fees is the worst for customer service.
“Our winner, for the second year running and by a wide margin, is TradeKing. The people at this five-year-old firm communicate with customers a lot, from its blog-happy CEO to the customer-service reps who respond to calls and e-mails with lightning speed. (The firm answered one call in 36 seconds, less than half the average time it took brokers in our survey.)”
Research
- Best: E*Trade
- Worst: ShareBuilder
“The new frontier in this area is social media: Most of the firms in our discount-broker survey are hosting conversations about investing ideas on Facebook and Twitter, while a growing number are setting up similar forums on their own websites.”
Trading Tools
- Best: Fidelity
- Worst: Vanguard
“Of course, spiffy trading tools are of no use if the trading isn’t fast and easy, so SmartMoney asked Gomez to test how rapidly customers can place trades on these sites. Fidelity, the fastest, clocked in at less than four seconds. Vanguard was the clear laggard.”
Mutual Funds and Investment Products
- Best: Fidelity
- Worst: ShareBuilder
“In recent years Fidelity, TD Ameritrade and Charles Schwab have finished nose and nose in this category. All three brokerages sell thousands of mutual funds, a smorgasbord of government and corporate bonds, stock options and commission-free ETFs.”
Banking Service
- Best: Fidelity
- Worst: Vangaurd
“”My broker has become my bank,” Schwartz says. That kind of talk is music to the ears of brokerages, of course; for years, they’ve been rolling out banking services whose fees can help offset the lower trading commissions they earn during down times. (And those fees can add up quickly: If customers want a debit card for some brokerage accounts, for example, they can wind up paying as much as $50 a year, plus $1 for every ATM withdrawal.) Not to mention, a banking relationship makes it more cumbersome for a customer to leave.”
Overall 2011 Broker Ranking
- Fidelity
- TD Ameritrade
- Scottrade
- TradeKing
- Charles Schwab
- E*Trade
- Vanguard
- Merrill Edge
- optionXpress
- ShareBuilder