Every year, the venerable financial weekly, BARRON’S, publishes a list of the best online brokers of the year. Subscribing to Barron’s is EXPENSIVE–$20 a month–so I am going to give you their info for free. However, if you get serious about investing, you should consider a subscription because, unlike a site like Nerd Wallet, which I generally like, they are old school journalists, which means they don’t take money from their advertisers to write about them. For example, Nerd Wallet says Ally Invest is the #1 broker for beginners. Ally doesn’t even show up on the Barron’s list , but Ally pays Nerd Wallet money so that buys them placement.
- Interactive Brokers http://interactive brokers–Traditionally, this site has been the go to for active traders, partly because their commission for trades is the lowest in the industry ($2.17 for 1,656 shares). This past year, however, they have made an effort to broaden their appeal with the introduction of an “Ibot”, which uses AI to predict behavior. For example if type ‘Buy Tesla’, it will know what you want, even if you don’t know the stock symbol. Meh, how hard is it to look up a stock symbol?
2. Fidelity http://Fidelity Investments–I am biased because I keep my money at Fidelity but I was glad to see Barron’s second my choice. The site has been getting better and better every year, with pretty graphics and easy to understand features. Trades are $4.95 each, which is about the industry standard. There used to be a strong bias towards Fidelity funds but I see that less these days. Their snapshots of companies are super helpful for info like P/E ratios and analyst recommendations. Their analysis of mutual funds is equally helpful with idiot-proof features like graphics measuring risk and expenses. The folks on the phone if you need to call are super helpful and sound like the dad on Leave it to the Beaver. My one bitch about them is how they handle cash core positions. Currently, they pay about 1.5% on Money Market but charge a .42% in expenses. Insert frown face here.
3. E*Trade– This may be the best site for novice investors as they have made an effort to include things instructional videos and easy to understand graphics. They also have a cool feature that lets you design a portfolio based on themes, like gender diversity or clean water. Barron’s dings them for charging $6.95 a trade but if you don’t trade much, what’s a dollar here and there?
4. TD Ameritrade– I have a grudge against founder Joe Ricketts for summarily folding his news organization, DNA Info, after employees voted to unionize, so I will say no more. Oh, ok, I will add just this, they have an app that lets you trade using Alexa.
“Alexa, buy Apple!”
Alexa: “Red delicious or Granny Smith?” Har.
5. Merrill Edge–This site gets high marks for novice investors but beware, if you don’t opt out, you could be swamped with marketing pitches from Merrill Lynch, which employs 15,000 financial advisors hungry for your business.