Joe Lan, CFA is a financial analyst at AAII.


Discussion

Paul from NY posted over 2 years ago:

This survey has been consistently disappointing and least useful. You should compile and compare other important, public information; and you should solicit and compile experienced users' comments.

For example, at TDAmeritrade, the active trading tools are ThinkOrSwim, Trade Architect, and Command Center. One of the flaws they all share is that the average cost per share shown in your open positions is wrong. Yes, it doesn't match the correct calculations, which you have to do yourself or access through a separate interface. This makes it impossible to know if a trade will work or not (using average cost per share as a cost-basis). Never mind trying to pay attention to actual, FIFO, tax-lots. That requires multiple clicks through a separate interface.

Also - I've been an "Apex" customer for many years - I've watched the customer service decline to the point that I now intend to change brokers. Software bug reports and enhancement requests are never (ever) acted upon. Trade Architect, their newest trading front-end, has columns that can't be resized, so you can't see all relevant data; you have to constantly scroll horizontally. Command Center, which has the most flexibility, is no longer being supported.

Price improvement matters: In future reports, I also urge you to compare the brokerages' SEC Rule 606 reports, which reveal payment for order flow arrangements. I also urge you to compare execution quality reports. Ideally - but usually deliberately difficult to dig out - it would be nice to know how significant the revenue is from payment for order flow. That is, which broker has the least significant payment for order flow and the "best execution," by which I mean price improvement.

I'l stop here. Call me if you want to discuss. I'm the former president of Watcher Technologies, which was a wholly owned subsidiary of Datek. And, other than the broker comparison, I'm very happy to be a lifetime member of AAII.

Paul Hindes
+1.845.468.5408


Joe from IL posted over 2 years ago:

Paul,

I will keep your comments in mind for future online broker comparisons. This article shows up in our print version so we have to keep in mind the length of the article. There is limited space after touching on the areas most used by our readers. However, your comments are helpful and I will revisit your comments and, although I can make no guarantee, I will see if I can touch on some of these in our next article.


Shane from TN posted over 2 years ago:

"I'm the former president of Watcher Technologies, which was a wholly owned subsidiary of Datek." Paul Hindes

Paul, I just wanted to comment that way back in time I was a customer of Datek prior to the Ameritrade buyout and loved what Datek had going and how it's default screens were setup. I was pretty upset when it went away - they had gotten so many things right in my view.


Richard from FL posted over 2 years ago:

I enjoyed your article. I started out with Datek that turned into TDAmeritrade. I've been an Investools subscriber for many years which was acquired by TDAmeritrade. It's time for me to renew with Investools, $299/6 months. I started looking for another providered that will track my portfolio and provide up to date quotes, news and charts on my various investments at my brokers and banks. I have not found a portfolio tracker that will provide all of my quotes, news and charts at the touch of a button. I can research one investment at a time, which is very time consuming.

Do you know of any broker that provides as easy a porfolio tracker as Investools? Or, should I buy another subscription and wait for the brokers to get up to speed?


Charles from PA posted over 2 years ago:

Are there any AAII articles that discusses the various options US investors have to trade foreign equities (I am particularly interested in trading on the regular TSX and TSX Venture exchanges)? In this review of the "big" five online brokers, I note you flagged Etrade as the only one of the top five to offer this service. Are there others, what are their pluses and minuses and their fees. An article on the ways to invest in foreign equities would be very helpful, since a number of foreign stocks are only available on the OTC market and those are often thinly traded. In searching the internet for brokers handling foreign equities for US residents, I find a huge variation in fees for online transactions, sometimes including a % of the value of the trade (for penny stocks below $1 or so).


Aleksander from IL posted over 2 years ago:

I guess investing/trading it is all about making money.The margin interest charged by brokers mentioned in the article is all about making money for brokers rather then investors/traders.Compare 8.5% charged by Schwab and 1.62% charged by InteractiveBrokers.On this comparison alone I feel that the article is incomplete.


Vernon from FL posted over 2 years ago:

Paul - Thank you for your comments. I was considering opening an additional account at TDAmeritrade and you saved me the waste of time and the expense.


Pete A from WA posted over 2 years ago:

I moved from Fidelity to Interactive Brokers late last year. $1.00 commission (IB) instead of $7.95 (FI). (I asked Fidelity to do better, and they could do was offer me a few free trades). My system requires lots of buys and sells, including many odd lots, and was much less profitable with FI.

I'm very happy with IB, and have had no problems they weren't able to help with. I'd been warned that they had "no customer service" at that price. Wrong. They've been very quick and very good at answering my few questions. AND their interface is "excel like" and very easy to use. Finally, I can upload tickers, format, comments and such automatically from my Excel based system.

It is important to note that they costs are WAY below the others (and fills seem to be about the same), but they do charge for some services that are "free" on the others; most of which I do not need and do not wish to pay for. These charges are built into the large commissions of the "discount" brokers.

Pete A


Thomas Welch from NM posted about 1 year ago:

I double checked the Scottrade Website. They advertise $7.00 online trades. Your information says $3.25. Where did you get that?


John A from FL posted about 1 year ago:

Tom, 3.25 is not a dollar amount, but rather a scale rating from 1 to 4.


David Cummins from IN posted about 1 year ago:

I'm a current TD Ameritrade customer. Before that, I was a very happy Waterhouse customer. I've seen Ameritrade's customer service quickly degrade over the last few years. I'd like to hear more about Interactive Brokers and any other broker whose commissions are below, say, $7.00.
What are the pros and cons?
Thanks,
Dave


Roger Ishii from MD posted about 1 year ago:

I too would like to see an article assessing discount online brokers outside of the "Big Five." For example, I saw an ad for OptionsHouse, whose flat rate for stock trades is $3.95. USAA is $5.95. I know USAA is a well-run company. Anyone have experience with OptionsHouse?


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