Rating Brokers

Smart Money recently had a review of online brokers. I use Ameritrade (soon to become TD Ameritrade) which is pretty good for my needs, although the “account” screen is a bit confusing.

For premium discounters, Smart Money likes Fidelity. Harrisdirect was their top basic discount broker. They also give high marks to OptionsXpress.

About full-service firms, Smart Money said:

Whether you are thinking about making the move to a full-service broker or are frustrated with the one you have because he doesn’t return your calls, it helps to understand the economics of the business. “If the account is not more than $250,000, it becomes difficult for the brokerage to make money,” says Brad Hintz, a brokerage analyst at Sanford C. Bernstein. Accounts below that level get “generic support” from a call center, he says. And when it comes to the big firms, say, UBS or Smith Barney, Hintz is probably lowballing that estimate. Some brokers we spoke with said their services are aimed at clients who bring half a million dollars to the table. Of course, if you want your broker to join you on the beach, it’ll take a bit more.

Of the full-service firms, Smart Money gives its highest rating to Edward Jones.

Posted by on September 15th, 2005 at 9:03 am


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