Best Brokerage Accounts
Brokerage firms provide varying levels of services and advice to investors large and small. The right brokerage for you depends on many factors, including how much you have to invest and your purpose for investing.
With so many brokerages to choose from it can be hard to know what features you should consider when shopping for a brokerage. This guide will show you how to filter your options and find the best brokerage for you.
Common Questions
What type of brokerage is the firm you are considering?
When setting out to select a brokerage firm, there are a few types you can choose from:
- Full-service brokers offer the largest variety of financial services and will typically assign a licensed advisor to each client. These firms will usually charge higher commissions and fees.
- Discount brokers have smaller commissions and fees, but don’t always offer the more specialized products and services that full-service brokers carry.
- Robo-advisors provide automated portfolio management, which allows brokers to offer investment advice based on algorithms with little to no human intervention.
You will also find firms that provide a mix of the above brokerage types. For example, a company may provide an online broker dashboard with the option of enlisting the help of a broker to help with trades.
The right firm for you depends on your budget and how much assistance you need. Full-service brokerages feature traders who suggest or actively make investment decisions on behalf of their clients, while self-service online brokerages provide tools for investors to make their own transactions with little guidance. Naturally, full-service brokerages tend to be more expensive, but the expense may be worthwhile for novices. However, online brokerages are growing in popularity for all types of investors from beginners to experts as they offer convenience and varying levels of support.
What types of investments does the brokerage firm manage?
Riskier vehicles have a larger potential for both gains and losses. Stocks, futures, options, and FOREX (currency trading) are among the riskiest investment vehicles. Less risky ventures with somewhat lower yields include municipal bonds and mutual funds. Experienced investors will be drawn to brokerages offering a range of investment vehicles, while novices may be okay with brokerages that focus on one or two.
What fees does the brokerage firm charge?
Fees are, of course, a big factor when choosing a brokerage firm as they will eat into your profits. Carefully compare the fees listerd in the brokerage reviews below. The fee types and amounts will vary from one firm to the next so it’s important to find out about any and all costs that will apply to your trading.
Common fees include:
- Broker assisted trading fees
- Online trade fees
- Annual fees
- Outgoing international bank transfer fees
- Incoming international bank transfer fees
- Incoming domestic bank transfer fees
- Returned deposit fees
- Exchange-traded fund trade fees
Fees can vary according to the level of assistance provided, the amount of money involved in a transaction, and the number of transactions completed within a month. Compare the fees of the firms you are considering to find the best value for your needs.
What trading tools does the brokerage firm offer?
The standard brokerage features to look for include real-time quotes and filtering tools that allow users to monitor particular stocks or set limits according to price, volume, return on investment (ROI), and other factors. You should also look for brokerage services that allow you to create watch lists that include multiple buying and selling points for individual stocks. Experienced investors should seek brokerage services that allow users to add technical indicators and visual representations.