Top Brokerage Firms
Investors in U.S. now have many options to choose from when it comes to brokerage firms. From small brokers to large, from new entrants to old dogs,
traders have a rich selection of investment companies that fit their particular needs. In this highly competitive market environment, brokerage firms
must maximize profits in some areas while cutting fees in others to attract and keep customers. So who comes out on top in 2018? Let's take a look to
find out.
* - Ally Invest offers special pricing of $3.95 per equity trade and 50 cents per options contract for users who make
30 or more trades in the prior calendar quarter and/or maintain an average daily balance of more than $100,000 in
the prior calendar quarter.
Best Brokerage Firms On The List
Coming in at 4½ out of 5 stars the best brokerage firms in 2018 are TD Ameritrade and Ally Invest.
TD Ameritrade is a well-known, established and heavily-advertised
online broker. With 10 million customers, the company is among the five biggest brokerages in the U.S.
TD Ameritrade has no minimum opening deposit, which gives investors a great opportunity to explore the broker's trading platform and other features before committing
any money. The broker offers the best in the industry trading platform called Thinkorswim at no charge to all customers.
New investors can start investing
with the broker's website-based trading platform and move up to either of TD Ameritrade's two advanced trading platforms
as soon as their trading skills improve. In contrast, the majority of other brokers charge steep fees for their advanced trading tools.
Free advanced trading tools, great customer support, personalized service at branches, a broad set of instruments, including great
selections of mutual funds and one of the best selections of commission-free ETFs, as well as the safety and security of a large company
make TD Ameritrade stand out among other investment companies on the list. TD Ameritrade was Barron's top online broker
for long-term investors and novices. Also, the brokerage ranked among the best online brokers for in-person service and for options
traders (
thinkorswim platform).
Learn more about
TD Ameritrade »
Ally Invest is another high-rated brokerage firm that does not require a minimum investment to open an account and
provides an opportunity to explore their tools at no charge. This company offers some of the lowest commissions on stocks, ETF's and options.
Mutual fund commissions are the lowest among the largest discount brokers. Ally Invest gets top marks for a history of
excellent customer service, and for its trading platform Ally Invest LIVE that is fully customizable and user friendly.
Learn more about
Ally Invest»
Taking the third position is Firstrade. This broker offers trades for $0 and has no opening deposit requirement.
Firstrade offers all ETFs commission-free and free DRIPs. However, it lacks some important features such as 24/7 customer service and an advanced trading platform.
More about
Firstrade »
Other Investment Firms
Further down the list, there are three big-name companies which are offering services of both a traditional full-service brokerage house
and a discount broker. Rated four and half stars, these companies are Fidelity Investments, Charles Schwab and Etrade.
Customers receive more personalized services and some features that are not available at other largest broker dealers.
Buy-and-hold investors and those who prefer a more personalized approach will be satisfied. All three companies offer advanced trading platforms
for active investors.
Below them are TradeStation and Interactive Brokers - highly rated brokers catering to experienced and active traders. These companies offer the lowest per-share
commissions, advanced trading platforms and access to international markets. With main focus on high-volume frequent traders, TradeStation
requires only $500 minimum deposits to open an account. TradeStation's direct-access trading platform is highly customizable and one of
the best in the industry. Interactive Brokers was the cheapest online broker for occasional and frequent traders before Firstrade lowered its cost to $0.
IB's standard trading commission is $0.005 per share with a $1 minimum and a maximum of 0.5% of trade value.
The well-known Vanguard brokerage scores just 3 stars. The standard trading fee is $7 or $20 (higher account balances qualify for lower commissions),
and there is a $1,000 minimum opening balance. Unfortunately, Vanguard has annual fees on its IRAs and offers poor trading tools. Small investors
with low account balances would do better at TD Ameritrade or Firstrade.
#10 on our list, Motif Investing was ranked the №1 Most Innovative Company in Personal Finance by Fast Company. Motif allows investors
to buy a basket of up to 30 stocks or ETFs in a particular sector for a low flat fee. The broker does not require a minimum deposit
to open an account.
Further down, Merrill Edge offers flat-rate commissions, has no minimum funding
or balance requirements and no maintenance or inactivity fees for
its taxable brokerage or IRA accounts. The broker offers mediocre services in comparison with the leading brokerage firms. However,
current Bank of America customers might find Merrill Edge services very convenient.
Wells Fargo's self directed brokerage firm - WellsTrade - has average commissions, poor trading tools and some fees that are not charged by many other
competitors. On the bright side, the brokerage offers good banking services.
Capital One Investing earns 3 stars with $6.95 trades and no minimum opening deposit. Combined with good research tools, well priced IRA accounts and a
convenient link to Capital One bank deposit accounts, this brokerage might be attractive for existing customers of Capital One bank.
Another 3-star rating goes to Sogotrade. This broker charges low $5 for trades and has no opening deposit requirement, which is a good
deal for small investors. However, this low-cost brokerage has a history of customer service complaints.
USAA Investments moved down a few spots on the list. The brokerage offers good investment services but is falling behind competitors in some
important areas. The firm's fees are clear and straightforward but commissions are considered high by the industry's standards.
ChoiceTrade is another broker that receives 3 stars. It has $5 commissions and no opening balance requirement. Mutual funds are reasonable $25 per trade.
However, mutual fund investors would do better at Ally Invest or Fidelity. Direct Pro, the broker's advanced trading platform, costs a staggering $49.95 per
month. Complaints from its customers regarding the website and customer service knock off 1 star. A steep quarterly inactivity fee is another major
drawback.
Just below it is SpeedTrader which is focusing on active traders. Advanced trading platforms are offered for high fees. No investment research is
provided.
Trading Block is one of the companies that participated in the Barron's survey. Unfortunately,
its rankings are very low in most categories. The company finishes very close to the bottom of the list.
Investrade offers an average trading commission and fairly good trading platforms. There is an annual inactivity fee, which can be
avoided with balances over $10,000. The broker's annual IRA fees are another drawback. There are companies in the list with cheaper pricing on options for stocks.
Final Thoughts
Which brokerage company is the best for a particular investor ultimately depends on many factors. Firms with no minimum deposit requirement, such as
Ally Invest and Firstrade, would be a good choice for investors who have low capital to invest. Investors who don't trade frequently should consider
TD Ameritrade or Etrade for their advanced tools. Traders who need good customer service and have at least $2,500 to deposit can look to Fidelity, Etrade, or Charles Schwab for some extra guidance.
Only the largest online brokers are included in our list of top brokerage companies. Firms' star-ratings, trading commissions, and minimum initial
deposits to open an account are provided in the table above. Brokers are rated based on a 5-star rating system, with the highest score being 5 stars,
and the lowest score - 1 star. We considered a variety of ranking factors, including broker's commissions, additional account fees (annual,
maintenance, and inactivity fees), customer reviews, investments offered, trading platforms, customer service, educational materials,
and investment research.
If you have experience (positive or negative) of investing with an online brokerage house from the list above and you would like to share
your opinion, please visit a company's review page to post your feedback, or leave your comment below.