Brokerage comparison

DPN

I did a search but didn't find a thread on the topic.

I am considering which brokerage I want to choose for my primary retirement account. The same question for non-retirement investing if the recommendations would be different.

I currently have Fidelity and Scottrade accounts and feel just fine about them both but I'm considering T. Rowe Price and Vanguard also. In terms of a brokerage comparison what are the favorite brokerages people here use.

Considering selection, performance, no fee funds, and of course customer service resources. Being able to talk to a real person for options is important to me.

A firm with as little exposure to European debt is good too but I'm not sure if that really matters if I am SIPC and FDIC covered.

DPN

Sven

We have been using Fidelity as our primary brokerage for long time. Their website continues to improve year after year and that is important to us since we do all transactions online. Customer service is excellent and they have branch offices nearby. Both Fidelity and Schwab have the largest selection on no-transaction fee funds. Beware that NTF funds also comes with higher expense ratios, i.e. no free lunch here. We pay the $75 transaction fee and buy institutional share which have lower ER. Subsequent purchase is only $5, and there is no charge for selling. By the way Fidelity is our 401(K) plan administrator and they are really good.

At the same time we also use Vanguard for their low cost index funds. You can also buy Vanguard ETFs without commission.

msf

Despite my utter frustration with Fidelity this week, I'll generally second most of Sven's comment about them. If you're going with TF funds, Fidelity is a good way to do it, because of the $5 purchase/$0 sale pricing. Schwab may do the best job in offering load-waived funds (e.g. Federated, Victory, Nuveen) of any brokerage, and they do have more than a few inexpensive NTF funds. I keep looking at them seriously specifically because of the fund access they provide.

I've dealt enough with all of them (Fidelity, Schwab, Vanguard, TRP), at least on the fund side, to say that all of them can provide excellent service, in contrast to a place like WellsTrade. (Does anybody know exactly what funds one can buy there?)

Regarding physical access - this really depends on where you live. A curious, if useless bit of trivia is that Fidelity does not have offices in two of the ten largest (most populous) counties in the US. Schwab just opened its first office in Kings County NY, completing the top ten counties. Scottrade seems to have the most extensive coverage (500+ locations). On the other extreme is Vanguard (either with none, or with access at their headquarters - not sure). TRP isn't much better in this regard, missing nearly all the top ten counties. But if one is near you, it doesn't matter how many or few they have.

While I haven't use Vanguard or TRP brokerages, they share a couple of attributes that make them less than complete brokerages. One is that they each charge an annual fee unless you have $50K in their house funds. The other is that cash management services (checking, ATM, etc.) are restricted at Vanguard to $500K+ customers, and at TRP to those paying a $40 annual fee. Not deal breakers, but they're not going to be your daily financial institution.

On the cash management plus side - Fidelity offers a 2% back credit card; Schwab Bank has a debit card that waives foreign exchange fees (when traveling abroad). Both are nice little perks, and in fact I did open a Schwab taxable account specifically for the ATM card and their late, lamented 2% Visa card (also with foreign exchange fees waived) that they used to offer.

claimui

I switched to Vanguard about a year ago. I have used other brokerages in the past, and by comparison, Vanguard commissions are a little higher and there are not that many perks. However if you plan to invest a good amount of your portfolio in Vanguard funds, I think it is a very good choice. Their website is friendly and easy to use, and the customer service has always been excellent. There are some perks like access to the lower-cost Admiral Shares class of many Vanguard funds, and access to PIMCO institutional class shares for a $25,000 minimum. The NTF selection is pretty good as well.

The commissions (for transaction-fee funds) start higher but if you have $50k+ in Vanguard funds, the fees are reduced. At $1m+ (where I hope to be someday), they are even cheaper. If you only hold NTF funds then this does not matter much, but it is nice to know. Higher tiers are also supposed to offer higher levels of customer service, but I have always had good service regardless of tier.

Again if you do not care for Vanguard funds or low-cost indexes, there is probably not much for you here. I have about 30% in Vanguard funds (bonds and REITs) and another 10% or so in PIMCO funds (enough for institutional class), and most (not all) of my other funds are available NTF through Vanguard. As I get older I expect I will allocate even more to my Vanguard and PIMCO funds, so making the switch made sense to me.

MikeM

My 401k is with t.rowe price and I've been very happy with them. I don't know how unique the 401k arrangement is, but I have access to every fund trp carries, as if my 401k was an Ira.

It so happens the company I work for has recently gone into chapter 11. So, I will likely be "early retired". With that, I've asked the same question about which brokerage to transfer my 401k to an Ira. I've decided to split it between trp and fidelity. The main reason I'm going with fidelity is they have an office in our area. Sitting and talking with people is a huge benifit to me. And besides, their web site is probably second to none.

Good luck with your decision.

kevindow

Most of our assets are held at Wellstrade, mainly because WT offers 100 free trades of stocks, bonds, funds, or whatever per year for qualifying accounts ($25K invested with them, including a portion of a mortgage held with WF). It gets better: you can link a qualifying retirement account with a non-qualifying taxable account so that you also get 100 free trades in the taxable account. Finally, it gets better: I have been able to link my qualifying accounts with the non-qualifying accounts of our seven children so that their accounts also are entitled to 100 free trades/year. Furthermore, WT has no short-term trading fee other than that mandated by a fund's prospectus.

On the downside, WT has terrible, horrible, no good, very bad customer service, and they do not care what funds you would like them to carry. And if you have bad customer service, you must complain to the rep who gave you the bad service. As far as I can tell, there is no centralized customer service department.

We also have assets at Fidelity which has the absolute best customer service of all brokerages. Recently they decreased the minimum holding period to avoid a ST redemption fee from 180 to 60 days, which was a great move on their part. Now if they would only reduce the $75 fee to purchase TF funds.

Thinkorswim was the bomb, but unfortunately, they were purchased by the high-expense TDA. I am slowly moving funds out of TDA.

Kevin

[Deleted User]

You might consider USAA for some investments, if you wish to have access to full banking, insurance and brokerage accounts.

Dividends for checking and savings, no fees, free ATM, $5.95 stock purchases if you qualify as platium level, 50 free trades when you open a new brokerage account. Free financial advisors who do not operate on commisions.

The only hang up is that you/spouse must have served in the military or your parents to become a member of USAA.

Gratian