Barron’s Best Online Broker Rankings 2014

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barron2014Weekly business newspaper Barron’s just released their 2014 annual broker survey rankings. Here’s a snippet about their criteria (emphasis mine):

Our evaluation criteria focus on the needs of wealthy, active traders. We looked at eight categories of service, examining what can be traded online, how the tools work together across platforms, the design and capabilities of mobile platforms, educational offerings and customer service, as well as the nuts and bolts of placing and executing a trade. We closely scrutinized the various tools available for finding appropriate trades, including scanners and charts. When examining costs, we considered stock and options commissions as well as platform or maintenance fees, margin debt, and charges for transferring an account out.

Their overall winner was again Interactive Brokers, a broker designed for highly-active traders with an extensive feature set, low commissions, and low margin rates. However, IB also has a minimum opening balance of $10,000, a minimum monthly fee of $10 even if you don’t trade at all, and customer service that does not cater to casual investors. They recently starting waiving the $10 minimum monthly fee if your account value is at least $100,000.

I am not an active trader, but I still like having real-time quotes, a clean user interface, and helpful customer service when I need it. Thankfully, Barron’s again ranked the brokers for the rest of us:

Top 5 Brokers for Novice Investors

  1. TD Ameritrade. Performed well in customer service & education, research tools, and mobile offerings. Improved desktop site and mobile apps integration. Free real-time quotes from NYSE, AMEX, and NASDAQ Level 1 and 2.
  2. Fidelity
  3. E-Trade
  4. Charles Schwab
  5. Capital One Sharebuilder

Top 5 Brokers for Long-Term Investing

  1. TD Ameritrade. The only broker to provide a wide range of commission-free ETFs from various providers (not just their own in-house ETFs).
  2. Fidelity
  3. Charles Schwab
  4. Merrill Edge
  5. E-Trade

Top 5 Brokers for In-Person Service

  1. Scottrade. Scottrade has over 500 physical branches across US, so that when you call you reach a human in that local branch. Free in-person educational seminars are offered as well.
  2. Merrill Edge
  3. Charles Schwab
  4. Fidelity
  5. TD Ameritrade

Reading through the entire article, most of the brokers made a few incremental changes (better mobile app, new options tools) but nothing game-changing. So it shouldn’t come as a surprise that for the three niche rankings above, the Top 5 ended up exactly the same as the 2013 rankings. Again, Vanguard’s brokerage declined to participate and thus was not eligible for the rankings.

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  1. I have an account with Interactive Brokers. I’m glad they started waiving fees, which I qualify.

    I don’t trade much at all. I use the account for forex transfers. IBKR has the best forex rates, and you also get a free wire out every month (foreign wires included).

    The margin rates at IBKR are also the lowest in the industry. For this reason, the account acts like a buffer in case I need cash. I enabled portfolio margin in the account so the margin requirement is only about 15%. I don’t ever plan to utilize more than 10% of the liquidity.

  2. I have been with Interactive brokers with for last 4 years. As I don’t trade a lot, I pay monthly minimum of $10 a lot of times. It still works better than any other broker as my yearly expenses for commissions is $120 or little more. I looked at moving my IRA to them, but they had quarterly maintenance fee of $15 for IRA accounts. Just found out that it’s only $7.50 now, so I’ll look into it more seriously.

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