Brokerage Accounts: Where to Open One?
by Charles Rotblut, CFA
“Where should I open a brokerage account?” is one of the more common questions I am asked. My response is always, “it depends on what your needs and wants are.” Among the most important considerations are what types of investments you will make, what services you will use and what your personal preferences are. Cost does a play a role, but it is relative to the services you receive.
I give you some general suggestions that can help you make the decision as to where to open an account below. As you read them, keep in mind that this is a very personal decision. What makes sense for one person may not necessarily make sense for you.
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You should also consider that your first decision does not have to be your final decision. As you develop your skills as an individual investor, you may find it advantageous to move your account elsewhere. Thus, try to make the best decision you can now, with the realization that you do have the option to change your mind in the future.
What Will You Invest In?
Do you intend to buy individual stocks, exchange-traded funds (ETFs), mutual funds, bonds or some other type of investment? This is one of the primary factors you should consider because companies vary on what they will and will not allow you to trade.
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Discussion
When you mentioned "full service brokers", you didn't mention Edward Jones. A friend of ours is happy with them. How do they square up with the others you mentioned. Aren't the rated as one of the best?
posted about 1 year ago by William from California
I would hope that this article would have provided better information comparing the benefits and costs of the various online brokerages. For example, Scottrade has advertised that it has the best trade executions. This is a big money saver for those who want the best prices for stocks and funds. This overview article is not very useful.
posted about 1 year ago by Jerald from California
For what its worth, I have used Vanguard for 9+ years and just recently moved all my own investments including my spouses over to them. In my opinion the site is easy to use and the non-Vanguard trades are simple to execute.
posted about 1 year ago by Matthew from Wisconsin
I trade with Tradeking and really love it. The trades are only $4.95 each and someone gave me a free $50 credit promo when I joined (which is only good for my brokerage account, not my IRA with them), so that I basically got 10 free trades. They have great educational videos for anyone wanting to learn to trade options. Execution seems great, no complaints even in fast moving markets.
I've sampled quite a few brokerages over the years (Fidelity, Vanguard, Zecco, etc.) but Tradeking is definitely my favorite and the one I'll be sticking with for my brokerage and IRA accounts. Wish they offered 401k plans. I'd move everything to them if they did.
posted about 1 year ago by Indigo from California
