Greetings fellow fools

I'm a self taught investor who has long been a using traditional high service broker for a long time and am now looking to start an account with an internet discount broker.

My primary concern is the security of my personal information. I've read some very worrisome things about TD Ameritrade (who had previously been my first choice) on wikipedia http://en.wikipedia.org/wiki/Ameritrade)
and also about Zecco (according to the Better Business Bureau they are rated an F!!!).

I'd gladly pay more in commissions (I'm used to that already) for the piece of mind knowing that my information is protected as well as it reasonably can be.I'm pretty prudent on my end, I use two anti virus programs, two anti spyware programs and a firewall regularly. So it would be pretty upsetting to have my broker lose my ssn, driver's liscence # or other valuable info.

Ideally the brokerage would have a good customer service track record as well (in the advent something bad happens).

I plan on investing about 10k or so initially.

right now I'm leaning towards Firstrade. Any thoughts? recommendations?

oh and thanks in advance for your time

I my self have am thinking about using Trade King or Scottrade. One thing about Sottrade is I have heard they can issue you checks and a visa card to draw off of your account, but do not know if that is true.

"I myself have am thinking about using Trade King or Scottrade. One thing about Scottrade is I have heard they can issue you checks and a visa card to draw off of your account, but do not know if that is true"

thanks for your reply. Do you happen to know anything about their data protection strengths of encryption? i.e. how safe they are?

It would be nice to the ability to write checks out of the account, but I can live without that feature.

And yes it does appear Scottrade offers debit/ atm and checking
http://www.fool.com/dbc/tables/scottrade.htm?source=dbcmainp...

oh and to clarify I'm more concerned with database security than whether or not they are SIPC certified

here's why i''m worried about Ameritrade
http://www.amtd.com/spam_faq.cfm

For new investors to the On-line brokerage community, I always recommend that they limit themselves to an on-line broker with an actual "bricks and mortar", or "steel and glass" office in their city. In the Kansas City Metro area where I now live this includes: Charles W. Schwab, Fidelity, TD Ameritrade, Scott Trade, and perhaps a few others.

The very best security is to use a secure telephone over a voice encrypted telephone connection. The Pentagon, The CIA, the DIA, and other government "spook" agencies all have these. I used to work as a systems analyst in Honolulu for one of these, 1969-1972. I worked in a large underground vault, inside a mountain. The entry combination was changed every day. You received the next day's combination before you left the secure area for the day. Now, they usually use biometric identification for access.

Low cost per trade is somewhat important, however, I have four accounts, I usually have no more than two or three transactions per year - often only one per account.

Kahuna,CFA

Kahuna,CFA

For new investors to the On-line brokerage community, I always recommend that they limit themselves to an on-line broker with an actual "bricks and mortar", or "steel and glass" office in their city. In the Kansas City Metro area where I now live this includes: Charles W. Schwab, Fidelity, TD Ameritrade, Scott Trade, and perhaps a few others.

The very best security is to use a secure telephone over a voice encrypted telephone connection. The Pentagon, The CIA, the DIA, and other government "spook" agencies all have these. I used to work as a systems analyst in Honolulu for one of these, 1969-1972. I worked in a large underground vault, inside a mountain. The entry combination was changed every day. You received the next day's combination before you left the secure area for the day. Now, they usually use biometric identification for access.

Low cost per trade is somewhat important, however, I have four accounts, I usually have no more than two or three transactions per year - often only one per account.

Kahuna,CFA

Hey thanks for the advice Kahuna.

Personally I'd prefer a brick and mortar broker which is one of the reasons that attracted me to TD Ameritrade initially. I guess maybe Scottrade,Schwab or Fidelity should be who I look at next then. They have several branches in my area (Columbus, Ohio)

"The very best security is to use a secure telephone over a voice encrypted telephone connection. The Pentagon, The CIA, the DIA, and other government "spook" agencies all have these. I used to work as a systems analyst in Honolulu for one of these, 1969-1972. I worked in a large underground vault, inside a mountain. The entry combination was changed every day. You received the next day's combination before you left the secure area for the day. Now, they usually use biometric identification for access."

Wow that's pretty intense. That must have been quite an experience working in a hollowed out mountain. There was one of those near where I went for undergrad in Colorado. I think that's bit more secure than I feel need to go. I do place most of my orders currently in person with my financial advisor which I guess would hopefully be nearly that secure.

I guess really my main concern is the individual broker's database security. It's one thing to transmit your data and orders safely, but what they do with it in their own systems afterwards worries me more. Especially after what happened to TD Ameritrade and my own State's public records this summer. If anybody knows if any broker has a good reputation in that area, I'd love to know.

Thanks again for the advice Kahuna , I really appreciate it.

The security of your communication with the broker is almost meaningless if there is a backdoor to the database or if a backup tape is left in a cab.

It's possible that Ameritrade is the MOST secure now after taking such a big hit to their reputation. They immediately brought in experts to go over their code.

Bricks and mortar? Doesn't help protect the database. Somewhere, your information is in a computer.

I had multiple accounts before and only ran into one snag, it turned out to be tdameritrade, they lost my data, missed a intrest payment, will not answer the phone, and when I finally did get through the supervisor told me there wasn't nothing I could do about it. When they started giving me a hard time when I was trying to transfer my account out, I had to record the phone conversation and threaten to play it to a rep from the sec. Then my transfer happened, it was an absolute horrid experience. Everyone I know that has Schwab Fidelity Wellstrade and Vanguard seem to be happy. good luck

One thing about Sottrade is I have heard they can issue you checks and a visa card to draw off of your account,

I don't recall that, from back when I used Scot.

Anyway, there's not need for all that. Thinkorswim let's you do ACH transfers to/from a bank account. No fee and it only takes one full business day.

No idea whether they are more of less secure than anyone else.

"The security of your communication with the broker is almost meaningless if there is a backdoor to the database or if a backup tape is left in a cab.

It's possible that Ameritrade is the MOST secure now after taking such a big hit to their reputation. They immediately brought in experts to go over their code.

Bricks and mortar? Doesn't help protect the database. Somewhere, your information is in a computer."

Thanks for the reply Jeff. You more or less stated my concerns exactly, except you said it more clearly than I did. :-) I had the same thought about TD Ameritrade, but when I looked at their response to the situation and numerous allegations I found that alleged that the situation started in 2005 (and was only resolved supposedly in 2007) led me to believe that they probably still doesn't have good security practices. I hope for all their clients sake that they really do have it fixed.

"I had multiple accounts before and only ran into one snag, it turned out to be tdameritrade, they lost my data, missed a interest payment, will not answer the phone, and when I finally did get through the supervisor told me there wasn't nothing I could do about it. When they started giving me a hard time when I was trying to transfer my account out, I had to record the phone conversation and threaten to play it to a rep from the sec. Then my transfer happened, it was an absolute horrid experience. Everyone I know that has Schwab, Fidelity, Wellstrade and Vanguard seem to be happy. good luck"

Thanks Cstash. Man that sounds really unpleasant, I'm sorry that happened to you. I'll keep the brokers you mentioned in mind. Wellstrade looks they have a pretty attractive fee structure. Wells Fargo has a pretty strong rep in general about good business practices from everything I've seen so far. Only downside for me is that they don't have any locations in central Ohio.

Hi, Tastylunch
Ameritrade has been my broker for a long time.
Their website is better than that of Scottrade.

"Hi, Tastylunch
Ameritrade has been my broker for a long time.
Their website is better than that of Scottrade. "

Thanks for the input Latinus.
Their interface does look more sophisticated to me than Scottrade's if that's what you mean by better. Unfortunately I think I have to consider the safety (as much as one can reasonably expect anymore anyways) of my personal info first....

so far from what I've researched I haven't come across any major known breaches of Scottrade's database, but it wouldn't surprise me if they have been hit too.

I don't know what the Better Business Bureau says about Zecco, but I have nothing but praise concerning my dealings with them over this last year, and would highly recommend them. I know several others on this board do as well.

Raleigh1208

"I don't know what the Better Business Bureau says about Zecco, but I have nothing but praise concerning my dealings with them over this last year, and would highly recommend them. I know several others on this board do as well."

Hi Raleigh,

thanks for the input. In case you're curious what I'm referring to, you can look at www.bbb.com and then search for Zecco Trading and you'll see what the complaints are levied against them. When I last looked they've had 20 filed complaints and no responses to 15 of those which gives them and F rating. I'm pretty amazed they have an F rating, those seem to be pretty rare. At least I've never noticed one before.

Here's what the BBB site says an F rating means (from www.bbb.com)

"F
We strongly question the company’s reliability for reasons such as that they have failed to respond to complaints, their advertising is grossly misleading, they are not in compliance with the law’s licensing or registration requirements, their complaints contain especially serious allegations, or the company’s industry is known for its fraudulent business practices."


For comparison Tradeking has B+, Etrade has a AA
My guess is that it's nothing malicious on Zecco's part, rather they are a very young company and trying to grow very rapidly so they don't have enough staff to handle the inevitable complaints a business such as theirs would receive. Their FINRA record seems pretty clean (which one can check at www.finra.org) so I don't think they are necessarily fraudulent.

Still it's enough to keep me from using their service despite how attractive their fee structure or nice their overall service is :-(

I hope you continue to have a positive experience with them. Thanks again for the feedback.

Wow I stand corrected.

I just checked again and now Zecco's rating has improved to CCC!

Man I checked this morning they still were an F. I guess they must have noticed it. If so good for them.

Odd though that their number of complaints went down..... I guess the filers must have rescinded them?

well no matter the reason this is good news for Zecco account holders I would say.

It's possible that Ameritrade is the MOST secure now after taking such a big hit to their reputation. They immediately brought in experts to go over their code.

Bricks and mortar? Doesn't help protect the database. Somewhere, your information is in a computer. - JeffLandon | Date: 12/9/2007 4:56:29 PM | Number: 48549

A similar situation occurred with Abbott Laboratories(ABT) in the mid-nineteen seventies - contiminated IV solutions. The FDA required a massive recall, complete Good Manufacturing Practices audit, addition investment by Abbott followed before again regaining good standing with the FDA. Abbott became the Best of the Best after suffering through intense regulatory complience audits.

Kahuna,CFA

I don't see any evidence that Ameritrade has turned over a new leaf.

I just read Selena Maranjian's terrible article based on this thread. Her fact checking leaves much to be desired. She "sensed a lot of candor here, with the company spelling out what did and didn't happen"??? Selena's claims: "They immediately brought in experts to go over their code". However, that's not true at all. They waited about 2 YEARS!

As Tastylunch mentioned, the problem existed at least as far back as 2005. Ameritrade acknowledged being informed of the problem back in October 2005 - that's public record. Ameritrade finally told their customers in September of 2007, almost 3 years later. That's also public record.

Also, Ameritrade's CEO, Joe Moglia claims to "have no evidence to establish [social security numbers] were retrieved or used to commit identity theft." I find this hard to swallow. Notice how carefully worded this statement is. Ameritrade knows that there are Ameritrade customers who became identity theft victims during the 2 years or so that the thieves had full access to the database. So Ameritrade certainly had evidence suggesting identity theft as a result of the breach. It's all about artful manipulation of the English language. Joe Moglia is NOT saying social security numbers weren't retrieved and used to commit identity theft. You can be sure that if he knew that was the case, he'd be saying so!

Oh, and (IMO) the reason Ameritrade finally made a disclosure was because a court was about to issue a ruling on whether or not to force them to do so. Oh, and the fact that expedient disclosure is required by law was a factor too.

I just checked the Better Business Bureau rating on Zecco and it is average...a "C"---perhaps at one time they were rated an "F" but they joined the BBB in December and are making every effort to address any complaints.

sorry, I see that the original poster made this same discovery about Zecco...I guess I should have read the entire thread before posting.:-)