Find the Best Online Broker
Online brokerages put the power to invest right in your hands, and they are immensely popular for that reason. But the marketplace is chock full of them, so how do you determine which one is right for your needs?
Tom Anderson, senior consumer advice reporter for Kiplinger’s Personal Finance, picked the best brokerages for a recent column and came up with the five things you should look for before signing up.
1. Low fees and commissions. The evolution of online brokers has gotten to a point where some now offer zero commission trades. But they may be skimping on other features, so take the fees into account but don’t decide solely based on them.
2. Research and information. Fidelity and Charles Schwab have the best resources for users “hands down,” Anderson said. He was particularly impressed with Fidelity’s retirement income planner, which helps you figure out how you’re going to spend and save money in retirement.
3. Investment options. Fidelity, Schwab and E*Trade are the three best brokers when it comes to having access to foreign markets, and robust selections of bonds and mutual funds.
4. User-friendly platforms and customer service. TradeKing, a relative newcomer into the business, was the best in this category. Anderson said he found himself talking to a real person as soon as he called in. The broker also has a social network where you can post questions and get answers from experts and even the company’s CEO (TradeKing also had reasonable fees and ranked just behind Schwab and Fidelity in Anderson’s findings). OptionsXpress also had good customer service, Anderson said.
5. Bells and whistles. Fidelity was the best broker all around, according to Anderson. It has the most robust platform and access to the most tools, not just mutual funds, and has built a great online business.
>>See the full report from Kiplinger's here.