If all brokerages charged zero commission for trades, which brokerage would you pick?

[teelainen]

We were just about to open a Robin Hood account this morning until I heard about the Schwab news. It seems like all brokerages will eventually go to zero commissions.

Should we open our Schwab account now? Or should we wait until a better brokerage offers zero commissions? We are in no rush right now.

So in other words, if all brokerages charged zero commission for trades, which brokerage is the best and why?

[ResearchMed]

I wonder what will be happening to customer service, for when someone needs help, etc...

RM

[FrugalConservative]

Its the race to zero

[livesoft]

WellsTrade because it already charges zero commission for trades for me. Superb execution. Real-time updating of where your money is 24/7. Great 1099s on time and correct, too. Practically instantaneous cash transfers between brokerage and checking, so no overnight ACH needed. And timely payouts of dividends before the market opens on payable date and not after the market closes like some other brokers.

[Nate79]

The race to reduce cost of trade commissions started years and years ago with Schwab as an industry leader yet they have been able to have excellent customer service thru all the reductions. I don't see it changing any time soon.

[retiredjg]

Maybe you don't realize that free trades are easy to find for the types of funds that most people here would be interested in buying.

Vanguard funds are no commission at Vanguard. Fidelity funds are no commission at Fidelity. Schwab funds are no commission at Schwab. And many places (including Fidelity and Schwab) already have very long lists of funds/ETFs that they sell with no commissions.

So this new thing at Schwab is not that big a deal unless you are looking for a place to buy Vanguard funds with no commission (that can be hard to find).

The answer to your specific question is..I would stay at Vanguard since Vanguard had the best choice of funds when I started buying. If I were a new investor, I might go to Fidelity instead. They have good index funds and all I need and their customer service is said to be better.

If what I'm saying doesn't make good sense to you, you might want to re-examine the funds you want to buy.

[indexfundfan]

And timely payouts of dividends before the market opens on payable date and not after the market closes like some other brokers.

I think Schwab credits the dividends after market close, making it easier for them to capture the funds into their low yield FDIC sweep.

[DonIce]

All depends what you are looking for. For me, I am leaning towards IB for their low margin costs and access to cheap foreign currency conversion.

[RandomWord]

Its the race to zero

Why stop at zero? Maybe some broker will start paying us for our trades.

[GoldenFinch]

Its the race to zero

Why stop at zero? Maybe some broker will start paying us for our trades.

Is that similar to negative interest rates, but backwards?

[deltaneutral83]

If TDA were to let me trade ETF's commission free with a healthy transfer bonus I'd be there tomorrow. Love their interface and some of their tools. ME is the only brokerage that I know of that let's you trade commission free of any and all ETF's.

[Big Dog]

As a mutual fund investor, I don't trade, so commissions don't matter to me.

[Broken Man 1999]

DW and I get 25 free trades each year, and I trade so infrequently that I am in no danger of running out of free trades this year. This year I have been more active than any previous year, culling out individual stocks. Still have plenty of free trades left.

So, I have zero incentive to go to a brokerage that offers all free trades. I'm good with Vanguard brokerage. If I happened to be real active trader, might feel differently.

Broken Man 1999

[Lee_WSP]

Definitely not Vanguard. Their ETF trading platform is... bare bones. I'm not even sure it has timely information.

[neilpilot]

Its the race to zero

Why stop at zero? Maybe some broker will start paying us for our trades.

Actually, if I amortize the $6k in new account bonus money TDA has paid me since 2015 against the few ETF trades I pay for each year, it seems that TDA is already paying me for my trades. Based on my experience with Vanguard, Fidelity and Merrill Edge I would stay with TDA even if the other's all went to free trades.

[dual]

I don't trade stocks but I do buy a lot of Treasury securities at auction. A company like Merrill Edge that charges ~$30 to place an order at an auction is a big negative for me.

[Halfvolley]

I am a brokerage mercenary and my loyalty will go to the firm that values loyalty the most.

Also, I try to keep at least 100k in Merrill Edge for BOA Platinum Honors eligibility.

[Jack FFR1846]

I'd say either TDAmeritrade or Schwab. I have accounts at both. I find TDAmeritrade to have the best interface with the most information easily available. I find Schwab to have the easiest site to find account information and to buy or sell. To tip it to Schwab, I really like their ETFs and mutual funds. I also tend to get some kind of money offer from Schwab about once a year. Last year, a bonus for opening a credit card, and in the next few weeks, a targeted bonus to bring money into the account. I like money bonuses.

[birdog]

TD Ameritrade. They just streamlined their ACH process down to 30 minutes. If I initiate an ACH transfer to TDA from my bank the money is there and available to trade in less than 30 minutes. It used to take at least a day. I know their website well and prefer it over Fidelity.

[Grt2bOutdoors]

TD Ameritrade. They just streamlined their ACH process down to 30 minutes. If I initiate an ACH transfer to TDA from my bank the money is there and available to trade in less than 30 minutes. It used to take at least a day. I know their website well and prefer it over Fidelity.

Well, this is news. It used to be as you say, 1 day or more.

[SlowMovingInvestor]

Fidelity if they started offering bonuses.

Etrade is good with bonuses, so I might go with them otherwise, or TDAM.

Merrill Edge, I would keep 100K at least to get the highest status for credit cards.

[Dead Man Walking]

I opened a Chase YouInvest account because I bank at Chase and trading from their website is simpler because I can transfer money from my Chase bank accounts from the same website. I haven’t used any of their research tools because I use other sources; however, others have stated that they aren’t very sophisticated. Their trading platform is straight forward and simple to use. I have 100 free trades per year since I have a Premier bank account.

DMW

[Silence Dogood]

If all brokerages charged zero commissions for trades, it wouldn't change anything for me.

I am a buy-and-hold mutual fund investor.

[slick_dealer_05]

Whichever gives free Turbotax to atleast their Flagship equivalent customers .... as in Fidelity nowadays

[Startled Cat]

I've been a very satisfied Fidelity customer and will most likely keep them for checking and new investments regardless of whether they charge commissions (but I do expect them to match Schwab's move). That said, I did move my existing investments to Merrill Edge as part of a mortgage relationship discount, and while I don't think they quite match Fidelity's breadth of offerings and quality of customer service, it's been a pretty good experience. Notably, as of recently they offer money market funds with higher yields than those available at Fidelity.

Schwab seems like a strong contender as well. I don't have much direct experience with them, only having a brokerage account I don't use anymore that came over in the optionsXpress acquisition. (I just logged in for the first time in quite awhile and saw the account has a 1,183.93% total gain - too bad the cost basis is only $2.24!). Anyway, I've only heard good things. Their move to eliminate trading commissions raises my opinion of them further. If I wasn't already set up with Fidelity and Merrill Edge, I might consider switching.

I would recommend avoiding Robinhood, based on what I've heard. Their marketing seems oriented towards encouraging young people to speculate on stocks, options, and cryptocurrency, which I find very distasteful. They promote margin trading heavily. They are definitely pushing some bad finance habits that will bite people in a big way, especially when the market takes a downturn. Beyond that, it sounds like they are missing many of the features I'd expect in a brokerage.

[guyinlaw]

Does Charles Schwab block any ETFs like Merrill Edge and Chase do?

Merrill Edge blocks some vanguard ETF, WisdonTree NTSX, Avantis ETFs and other active ETFs. Does Charles Schwab do any such thing?

[Hector]

I have been with WellsTrade and have no plan of changing . I get enough free trades there.
I have experienced that trade execution at WellsTrade is better than TD Ameritrade.

These are couple of issues I have with them. But they are not big enough to change the broker yet.

• I can not exchange one mutual fund for another. I have to place the order to sell fund A today before cut off time. Cash would be deposited to account tomorrow. I would then only place an order to buy fund B.

• I can not buy individual bonds there for free.

I have minor issues with individual bond trading at Fidelity and Charles Schwab:

• If my bond is maturing on date XYZ, I can not buy another bond with same issue date. I can place order only after I have cash in account.

• I don't have that issue at Charles Schwab, but I have to call every time I want to do that.

[whodidntante]

Does Charles Schwab block any ETFs like Merrill Edge and Chase do?

Merrill Edge blocks some vanguard ETF, WisdonTree NTSX, Avantis ETFs and other active ETFs. Does Charles Schwab do any such thing?

Nope.

[RandomWord]

Its the race to zero

Why stop at zero? Maybe some broker will start paying us for our trades.

Actually, if I amortize the $6k in new account bonus money TDA has paid me since 2015 against the few ETF trades I pay for each year, it seems that TDA is already paying me for my trades. Based on my experience with Vanguard, Fidelity and Merrill Edge I would stay with TDA even if the other's all went to free trades.

Right, based on that kind of thing, I don't think negative commissions are totally impossible. As I understand it, brokerages make most of their money from the cash you have deposited there, similar to a bank. They can afford to take a loss on the commissions/bonuses and still make money.

[Hector]

WellsTrade because it already charges zero commission for trades for me. Superb execution. Real-time updating of where your money is 24/7. Great 1099s on time and correct, too. Practically instantaneous cash transfers between brokerage and checking, so no overnight ACH needed. And timely payouts of dividends before the market opens on payable date and not after the market closes like some other brokers.

Dividend from ADRs are paid after market closes at WellsTrade.

[2pedals]

What commissions? It's the overall package that draws me to a brokerage firm. Overall I like Fidelity.

[HEDGEFUNDIE]

I plan on using M1 Finance for my first taxable account to have access to their 4% line of credit.

[JoMoney]

Interactive Brokers seems to be very highly rated for people who trade a lot and actually need a lot of brokerage services.
Personally, I could get by without a broker if Vanguard still offered directly held mutual fund only accounts.
I do make use of Fidelity's bank-like features of their 'Cash Management Account'.

[usagi]

I would go with Fidelity or Schwab simply because I think they have stellar service and also have enough fee services that they are likely to be able to continue offering exemplary service even for those who go with low fee and no fee options.

[guyinlaw]

Schwab credits all fees charged by other institutions for transferring your accounts.

I don't see any reason to keep more that $50k at Merrill Edge.. (I want to keep BofA preferred rewards..)

[aristotelian]

Its the race to zero

Why stop at zero? Maybe some broker will start paying us for our trades.

They don't pay for trades per se but they do offer transfer bonuses. I consider them a negative fee or expense that offsets the money they are making from me somewhere.

[abuss368]

I would stay with Vanguard regardless as it has the unique structure: a truly mutual mutual fund company.

[AlohaJoe]

So in other words, if all brokerages charged zero commission for trades, which brokerage is the best and why?

I would still use Interactive Brokers. The main reason is: virtually all of the others don't allow non-US customers. So that makes it pretty simple. But it does have other nice things that I like. A few small things:

I get notifications about when dividends are declared, which is useful for stupid Vanguard and their "we pick a different day every single quarter because our operations are incompetent" dividends.

Once a dividend is declared, IB will show me my pending (but not yet paid) dividends and their dollar value.

If you have spec id, IB will automatically pick lots for you based on several potential algorithms (minimize LTCG, maximize LTCG, minimize STCG, etc). I think Fidelity has something like this, too? It always annoys me that I have to pick lots when it is obvious what 99% of people are trying to achieve when they sell a lot. Why aren't computers doing this for me with other brokers?!?

The securities lending is nice. The easy access to margin for cash flow is nice.

IB has the best forex, as good or even better than Transferwise.

IB can connect to my Australian bank account and not just my US ones.

[AlohaJoe]

I would stay with Vanguard regardless as it has the unique structure: a truly mutual mutual fund company.

Is this still really true?

People who have Vanguard Brokerage accounts aren't owners of Vanguard Brokerage (which is a separate company). People who use Vanguard PAS don't own PAS (which is a separate company yet again). People who buy a Vanguard ETF don't own, uh, whatever company makes that ETF, do they? If you bought an annuity from Vanguard you definitely weren't an owner of the insurance company that provided the annuity.

In other words, does Vanguard's mutual structure actually extend beyond its mutual funds to all the other products & services it offers these days?

[abuss368]

I would stay with Vanguard regardless as it has the unique structure: a truly mutual mutual fund company.

Is this still really true?

People who have Vanguard Brokerage accounts aren't owners of Vanguard Brokerage (which is a separate company). People who use Vanguard PAS don't own PAS (which is a separate company yet again). People who buy a Vanguard ETF don't own, uh, whatever company makes that ETF, do they? If you bought an annuity from Vanguard you definitely weren't an owner of the insurance company that provided the annuity.

In other words, does Vanguard's mutual structure actually extend beyond its mutual funds to all the other products & services it offers these days?

I believe so. Vanguard shareholders own the funds which own Vanguard. The ETF are one shareclass of the funds (believe disclosed in prospectus).

[aristotelian]

In order of preference:
1. Merrill Edge for the credit card rewards
2. Schwab for free ATM withdrawals and customer service
3. Vanguard for business model and reputation
4. M1 for partial shares

[Raabe34]

So in other words, if all brokerages charged zero commission for trades, which brokerage is the best and why?

The securities lending is nice. The easy access to margin for cash flow is nice.


IB can connect to my Australian bank account and not just my US ones.

Do you mean your ability to borrow against your securities or are you generating your own revenue that way?

[centrifuge41]

TD Ameritrade email from today:
“We’ve turned commission fee into commission free.
The investing and trading experience you know and love is getting even better. Starting on October 3, you'll also enjoy:

$0 commission on online equity trades
(exchange-listed U.S. stocks)
$0 commission on online ETF trades
(domestic and Canadian)
$0 commission on online option trades
(Contract fees now only $0.65, plus no assignment or exercise fees.)

The change to zero commissions comes with zero change to the level of service you've come to expect. You still get unlimited free access to our best-in-class trading platforms. Plus, you get award-winning service and education, and an extensive branch network. See, who says you can't get something for nothing?”

[retiredjg]

So no new free trades on mutual funds?

[placeholder]

I would continue to move to whichever gave bonuses and if those went away it would be Merrill Edge for the other benefits of Preferred Rewards.

[rich126]

Interactive Brokers seems to be very highly rated for people who trade a lot and actually need a lot of brokerage services.
Personally, I could get by without a broker if Vanguard still offered directly held mutual fund only accounts.
I do make use of Fidelity's bank-like features of their 'Cash Management Account'.

They have a lot of pluses and I know many like them. They charge very low interest for margin accounts and allow foreign currency exchanges (neither of which I get into).

My limited experience with them was very poor so I avoid them and TD Ameritrade acquired all of my accounts from acquisitions. Although I can't recall when I last used it, I can also trade futures with them. It is amusing how many interfaces you can use. They have a TD Ameritrade app, and also a ThinkorSwim app for phones and the iPad. Also there is a legacy ThinkOrSwim desktop app I have on my iMac.

I'm still learning Fidelity and have been using it only for fixed income. Their customer service has been very good. Vanguard I would put near the bottom.

[Cheez-It Guy]

If TDA were to let me trade ETF's commission free with a healthy transfer bonus I'd be there tomorrow. Love their interface and some of their tools. ME is the only brokerage that I know of that let's you trade commission free of any and all ETF's.

Guess you got your wish, or at least part of it.

[AlohaJoe]

The securities lending is nice. The easy access to margin for cash flow is nice.

Do you mean your ability to borrow against your securities or are you generating your own revenue that way?

Both.

[wander]

I am not moving my money anywhere.

[bling]

sticking with merrill edge myself. 2.625% minimum, up to 5.25% cash back on credit cards is too good to pass up.