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7BestOnlineBrokersforInvestors
Investorscanpocketafewhundredbucksjust
byopeninganaccountwithanonlinebroker
thesedays.Butdontletasigningbonussway
you.

Lowcommissionstotradestocksorexchange
tradedfundscansaveyoumoremoneyinthe
longrun.Whetheryoureastockjockey,asaver
oraretiree,findingafirmthatsuitsyourneeds
isfarmorevaluablethanevena$600bonus
(MerrillEdgescurrentinducementifyouopen
anaccountwithatleast$200,000).

Whatmakesforafirstratebroker?Itdepends
onwhatyouvalue.Lowfeesmaybecriticalfor
activetraders,butbuyandholdtypesmaywant
Thinkstock anarrayofnotransactionfeemutualfunds.
Brokerswithunbeatablepricesmaylackthe
retirementplanningtoolsoradvisoryservices
youneed.Weweightedthecategoriesbasedonwhatourreadersconsidervital:commissionsandfees,15%investment
choices,15%,tools,15%research20%15%mobileadvisory,10%.

Takealookatourreviewsofsevenofthebiggestbrokersintheindustrytoseewhichisthebestfitforyou.

Tobeincluded,firmshadtoofferonlinetradingofstocks,ETFs,fundsandindividualbonds.CapitalOne,T.RowePriceand
USAAalldeclinedtoparticipate.Wealsoexcludedsomebrokersthatfocusprimarilyonactivetradersandlackafullsuiteof
investmentchoicesandservices.

ByDarenFonda,

7BestOnlineBrokersforInvestors

1.Fidelity
OVERALL:

Costs:

Invest.choices:

Tools:

Research:

Easeofuse:

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Mobile:

Advisory:

BESTFOR:MutualfundandETF
investors

Fidelityoffersthebestoverallmixofinvestment
products,retirementplanningtoolsandservices.
Fidelityscommissionsarentthelowest,
especiallyifyouwantamutualfundforwhich
youmustpayatransactionfee.Butitspricesare
closeenoughinotherareastobecompetitive
withlowercostbrokers.Furthermore,Fidelity
winspointsforitsfullrangeofretirementand
advisoryservices,alongwithtopnotch
investingtoolsandcustomerservice.

Ifyourpriorityisinvestinginmutualfunds,youlldowellwithFidelity.Itoffersmorethan3,700notransactionfee,noload
funds,almostallofwhichhaveminimuminvestmentlevelsunder$50,000.

Fidelityalsoshinesforhelpingclientsmanagetheircash.Customerscanpaybillsandtrackspendingonalloftheirexternal
accounts.Plus,signupforaVisaRewardscardandyou'llget2%backonallpurchases,cashthatgoesrightintoyour
brokerageorsavingsaccount(soyou'llinvestit,right?).

EvaluateFidelityforYourself>>

1.Fidelity

2.MerrillEdge
OVERALL:

Costs:

Invest.choices:

Tools:

Research:

Easeofuse:

Mobile:

Advisory:

BESTFOR:Activestocktraders

Ifyouliketotradestocks,Merrillisyourbestbet.Itstherunwaywinnerinthiscategory,charging$6.95perstocktrade,the
lowestflatratepertransaction.InvestorswithabankaccountatBankofAmerica,Merrillsparentcompany,mayqualifyfor
upto100freetradespermonth,dependingontheircombinedbalances.Merrillalsochargesthelowestrate,$19.95,tobuyor
sellmutualfundsoutsideitsnotransactionfeefundnetwork.

Merrillisalsoastandoutforresearchonwhichstockstobuy.CustomerscanseeBankofAmericaMerrillLynchstockreports
onmorethan1,400companies,alongwithstockresearchfromMorningstarandS&PCapitalIQ.Merrillsbigeconomic
reportsandthematicpieces,suchasarecentreportonstockpicksforanagingglobalpopulation,arealsoavailable.And
customersgetaccesstoMerrillslistsofrecommendedstocks.

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8/31/2016 7BestOnlineBrokersforInvestorsPrintVersionKiplinger
Ifyouwantbondresearch,though,youllhavetolookelsewhere.Ratingsreportsonindividualcompaniesarentaccessibleon
Merrillssite.Bycontrast,E*Trade,Schwab,ScottradeandTDAmeritradefurnishcompanyreportsfromcreditratings
agencyMoodys.

EvaluateMerrillEdgeforYourself>>

2.MerrillEdge

3.CharlesSchwab
OVERALL:

Costs:

Invest.choices:

Tools:

Research:

Easeofuse:

Mobile:

Advisory:

BESTFOR:ETFinvestors

WegavebothMerrillEdgeandCharlesSchwabfourstars,butintheunderlyingscoring,Merrillrankedaheadbyawhisker.
WhereSchwabstandsoutbothagainstMerrillandallothercontendersisitswiderangeofcommissionfreeexchange
tradedfundsofferings.Youcanchoosefrom226,includingfundsfromiShares,PowerShares,StateStreetandWisdomTree.
NootherbrokerhasnearlyasmanycommissionfreeETFsE*Trade(118),TDAmeritrade(101)andFidelity(85)takethe
nextthreespots.

Schwabalsooffershelppickingthosefundsyouneedjust$25,000togetintoamanagedportfolioofmutualfundsorETFs
oneofthelowestbarsinthebusiness.SchwabalsooffersroboETFaccounts,freeofcharge,withonlya$5,000minimum
(seeslide9tolearnmoreaboutroboservices).

EvaluateCharlesSchwabforYourself>>

3.CharlesSchwab

4.E*Trade
OVERALL:

Costs:

Invest.choices:

Tools:

Research:

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Easeofuse:

Mobile:

Advisory:

BESTFOR:Investorsonthego

Allbrokerswesurveyedletcustomerstradeand
conductotherbusinessonamobiledevice.All
exceptVanguardletyouloginwitha
fingerprint.Andtheappscanbehandyfor
banking:Investorscanpaybills,transferfunds
andmore.

E*Tradessmartphoneappscoresbestinthis
category.Alongwithstandardtradingandaccounttools,itstheonlyonewithascreeningfeatureforstocks,fundsandETFs.
TheappalsoshowsE*Tradesallstarrosteroffunds.Andinvestorscanscanaproductbarcodetopullupstockinformation
(afeatureTDprovides,too).

Ofcourse,smartphoneappscanthandleeverything.Noneshowsadetailedanalysisofyourportfolioorletsyoutradebonds.
Stockandfundresearchremainssparseonphoneapps,too,althoughE*TradeandMerrillmakesomestockreportsavailable.

AnotherexampleofhowE*TradejustifiestheEinitsnamedecadesafteritslaunch:youcantracksocialmediasentiment
whatbloggershavetosayonindividualstocks.

EvaluateE*TradeforYourself>>

4.E*Trade

5.TDAmeritrade
OVERALL:

Costs:

Invest.choices:

Tools:

Research:

Easeofuse:

Mobile:

Advisory:

TDAmeritradeoffersahealthyrangeofnofee
mutualfunds(3,587)andcommissionfree
ETFs(101)tochoosefrom.HelpingyoupickisTDshandyfundscreener,whichletsyouseehowETFs,mutualfundsand
closedendfundswithsimilarholdingsstackupagainstoneanother.Anothercuttingedgefeature(thatitshareswithFidelity)
youcanusethesitetoseehowastockistrendingonTwitterandsimilarsocialmediasites.

EvaluateTDAmeritradeforYourself>>

5.TDAmeritrade

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6.Scottrade
OVERALL:

Costs:

Invest.choices:

Tools:

Research:

Easeofuse:

Mobile:

Advisory:

Ifbeingabletovisitabricksandmortar
locationandinteractingwithareal,livehuman
matterstoyou,considerScottrade.With495
offices,itscoreswellforavailability,secondonlytoMerrill(whichgetstopiggybackonthe2,000BankofAmericabranches
itscorporateparenthasnationwide).

EvaluateScottradeforYourself>>

6.Scottrade

7.Vanguard
OVERALL:

Costs:

Invest.choices:

Tools:

Research:

Website:

Mobile:

Advisoryservices:

BESTFOR:Retirees

AtKiplinger's,werebigfansofmanyofVanguardslowfeefunds.Butforthosewhowanttoinvestinstocks,bondsand
mutualfundsoutsidetheVanguardfamily,thebrokeragesiteitrunsdoesntmeasureup.

However,retireesareagroupwhocandorightbyVanguard.Customerswithatleast$50,000inassetscantapintothefirms
PersonalAdvisorServices,whichletsyouslideintoamanagedaccountthatchargesjust0.3%inannualfees.Thatlowrate,
coupledwithVanguardsultracheapindexfunds,isagreatrecipeforpocketingmoremoneyinthelongrun.

EvaluateVanguardforYourself>>
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7.Vanguard

RankingtheBrokersComputerizedAdvice
E*tradeandFidelityarenowrollingoutrobo
services,joiningSchwabinsellingmanaged
ETFaccountsthatareautomaticallyadjustedto
maintainasteadyassetmix.Whichoneis
best?

Onthesurface,SchwabsIntelligentPortfolios
lookunbeatableforonebigreason:Thefirm
doesntchargeamanagementfee.Customers
payonlythelowfeesoftheunderlyingETFs.
ButSchwabdoesntletcustomersstayfully
investedinstockandbondfunds,requiringat
least6%incashforaggressiveinvestors
climbingto29.4%forthemostconservative
portfolios.HeldatSchwabBank,thatcash
earnsjust0.08%ininterest,anditcanweaken
Thinkstock longtermreturns.

E*TradesayscashinitsnewAdaptive
Portfolioswonttop1%.Butallinannualcostsare0.50%forETFportfoliosand0.75%foraccountswithbothETFsand
mutualfunds.Conversely,Betterment(oneofthefirstroboadvisers)chargesamanagementfeeof0.25%ayearforportfolios
between$10,000and$100,000and0.15%abovethat.BettermentholdsonlylowcostVanguardandiSharesETFs,while
E*TradeincludessomepriciermutualfundsandETFs.

Fidelitywasslatedtolaunchitsroboservice,FidelityGo,inJuly.Thefirmsaysallinfeeswillbe0.35%to0.39%,which
wouldbeatE*Trades.AndFidelitysaysGoportfolioswillhold0.5%incash,muchlessthanSchwab.Thatcouldgive
Fidelityportfoliosaperformanceedgeoverthelongterm.

Ultimately,though,yourresultswilldependonwhethertherobotsdoabetterjobofmanagingyourmoneythanahuman.

RankingtheBrokersComputerizedAdvice

2014Rankings
1.Fidelity
2.CharlesSchwab
3.MerrillEdge
4.E*Trade
5.TDAmeritrade
6.Scottrade
7.TradeStation
8.TradeKing
9.Firstrade

Kiplingerupdatesmanyofitsbestrankings
regularly.Aboveisour2014rankingofbest
onlinebrokers.Keepinmindthatranking
methodologiescanchangefromyeartoyear
basedonwhatdatawasavailableatthetimeof
publishing,changestohowthedatawas
Thinkstock gathered,switchestonewdataprovidersand
tweakstotheformulasusedtonarrowthepool
ofcandidates.

TOOL:CompareLeadingOnlineBrokers

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8/31/2016 7BestOnlineBrokersforInvestorsPrintVersionKiplinger

2014Rankings

2012Rankings
1.E*Trade
2.Fidelity
3.Scottrade
4.TDAmeritrade
5.TradeStation
6.Firstrade
7.CharlesSchwab
8.MerrillEdge
9.Just2Trade
10.ShareBuilder

Kiplingerupdatesmanyofitsbestrankings
regularly.Aboveisour2012rankingofbest
onlinebrokers.Keepinmindthatranking
methodologiescanchangefromyeartoyear
basedonwhatdatawasavailableatthetimeof
Thinkstock publishing,changestohowthedatawas
gathered,switchestonewdataprovidersand
tweakstotheformulasusedtonarrowthepoolofcandidates.

TOOL:CompareLeadingOnlineBrokers

2012Rankings

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