I expect to make 10-20 transactions per year for the next few years in nonretirement investments. I could use Chase/JP Morgan but at 24.95 for the first 1000 shares I'd be squandering several hundred. How do I evaluate the discount brokers? I have 25,000 to open the account with and will invest an additional 25,000 each year for at least the next few years.
To evaluate the brokerage, you need to look at what they provide. Here are some of the things most people would consider important:1. Monthly/quarterly and annual summary statements. Are they concise, accurate and easy to understand?2. Availability of a place to go to do a face-to-face conversation with an agent of the brokerage. This is more important to some than to others.3. A 1-800 number that allows you to speak to a real person with relatviely few telephone button pushes4. Accurancy. Are statements and annual 1099's correct?5. Selection of MFs. Does the brokerage offer a wide selection of NTF mutual funds?6. Services. - Can you transfer $$ on line or in person with relative ease? - Stock research tools - MF research tools - Portfolio management toolsWhen I first started doing my own portfolio management back in the mid 90's, I went initially with American Express, as they allowed a certain number of free trades. What a complete disaster. Statements were routinely inaccurate, 1-800 service was poor and investment selection was minimal. I transferred to Fidelity in 1998 and have been there every since, as they meet all of my above needs.BruceM
I am with Ameritrade and am satisfied with everything Bruce mentions, except they don't offer #2 (face to face) which doesn't bother me. But I am not replying to necessarily reccommend them but to add one more item to Bruces list that may be worth some consideration and further research.That item is - order excution. This is way more than the ease of use of their online order entry feature.I really am not a soshisticated trader but for about a year I was interested in participating in the after hours or pre open markets. The capabilty offered by AMT was cumbersome and confusing - eg routing a specific order to a specific exchange, and lots of other stuff like this. Another item is partially filled orders, does the unfilled portion of the order spill to next day, and if so do you pay another commission. Does their order entry provide selections for a "Fill Fully" option at order placement time? So if these things are important to you, it is one more area to evaluate when you consider a broker.FWIW,... bhm
You might check the Discount Brokers message board at http://boards.fool.com/Messages.asp?mid=25881752&bid=100146Read the FAQ and the past few weeks of postings and post your question there if you don't find the information you need.I have an account with Scottrade and am satisfied with them. There is a Scottrade message board at http://boards.fool.com/Messages.asp?mid=25838177&bid=115617You might check magazines such as Money, Smart Investing, Kiplingers Personal Finance, and Barrons that often publish evaluations of brokers. The American Association of Individual Investors also does an annual evaluation of brokers. Informtion can be found at http://www.aaii.com/includes/DisplayArticle.cfm?Article_ID=3071&CFID=2584641&CFTOKEN=58408687Bob
You'd be in the holdings range that gets a pretty good deal at Fidelity, and I find them very helpful on the phone most times.
Now I'm really going to sound like a plant from the Champion Funds Board (I just advised someone else to check it out for an allocation question), but this topic is coverd frequently on their Open Forum Board. One of the TMF Moderators (Sorry Ryan and Mark, I can't remember which of you does it) even shares a spreadsheet regarding the discount brokers that compares them all and tells what Champion Funds they have accessible. Great Info. I found Firstrade that way a year or so ago, but I'm not certain it remains the one I would recommend. I pleased with them, but things change.Hope this helpsJim
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