Barron's online broker ratings, reviews, rankings, and comparison for 2016

Barron's magazine annual stock broker survey and review of the top rated, best discount online trading (investing account) companies.

Barron's Broker Survey

In March of 2016 Barron's magazine published results of its 21th annual online broker survey (see table at the bottom of this article). The readers should keep in mind that in Barron's own words "Our primary consideration in judging these 16 firms is how they work for our readers, who are high-net-worth active investors". In other words Barron's rated online brokers on how well they suite rich investors who trade a lot. If you don't fall into that category, the results below might not be the best for you: at many firms active traders get better pricing than most regular investors, and they don't pay steep account inactivity and trading platform fees that some of the Barron's top brokers charge. High-net-worth investors with large accounts (even those who don't trade much) also get waiver on certain fees, and lower commissions at some brokerage houses - so check what your costs are going to be before opening an account.

For example, if you have a large portfolio along with a sizeable 401(k) with investments in a single fund family such as Vanguard (not rated in Barron's survey), you may be eligible for discounted commissions based on your total assets. With at least $500,000 invested with Vanguard, you would incur no brokerage fees when buying or selling Vanguard funds. Other mutual fund commissions would be only $8. Similarly, options commissions at that level are $2 + $1 per contract, and stock and ETF trades cost only $2. It might take some digging, but those so-called "loyalty discounts" may offset seemingly high commissions and make a particular brokerage a stronger option when comparing fees.

To pinpoint 2016’s top brokers, Barron's analyzed not just their security, mobility, and social media features but the depth of their investment tools and their trading capabilities. Customization, especially of reports, is a particular focus, as is the ability to move smoothly from idea generation to a trade ticket.

16 United States brokerage companies, which agreed to be rated by Barron's (some didn't), were evaluated in the following categories: Mobile Trading, Trade Experience, Trading Technology, Usability, Ranges of Offerings, Research, Portfolio Analysis, Customer Service, and Costs. As in the previous years, Costs category (commissions and fees customer pays) has the same weight on the overall broker score as the other categories. We believe it is by far the most important factor for majority of investors, and in our own Online Broker Comparison we gave it much more influence on the final score as well as on brokerage ratings and rankings.

Barron's Best Brokers in 2016

In 2016 Barrons best online broker is Fidelity Investments. The company in Barron's own words "made it to the top this year due to the variety of trading and investing tools, and the quality of its trade execution."

Interactive Brokers is the second best discount broker according to Barron's magazine. Keep in mind, that customers that don't make at least $10 in commissions per month pay $10 monthly inactivity fee ($20 for accounts with less than $2,000) and $10 monthly for market data. Two of our favorite companies, OptionsHouse and TD Ameritrade are the third and fourth top brokerages according to Barron's magazine online broker survey. They don't charge inactivity fees.

The fifth place - TradeStation - is rated 4 stars by both Barron's and us. We would rate it higher if it wasn't for a $99.95 monthly fee charged if a client did not trade at least 5,000 shares in previous month (or 50 options contracts a month; or 10 round-turn futures or futures option contracts; or 50 round-turn single stock futures).

Our other top rated online investing companies - TradeKing and Etrade - got high rankings and scores in Barron's magazine broker survey too.

Below you could see the comparison chart of 2016 Barron's annual online brokers review, along with broker ratings and rankings.

Barron's Broker Survey Comparison Chart

Broker Trading
and Tech
Mobile Ranges of
Portfolio Analysis
and Reports
Client Service Costs Total Stars
Fidelity 4.7 4.5 4.9 4.4 4.5 4.8 4.9 1.8 34.9 4.5
IBKR 4.5 4.0 4.7 4.4 4.2 4.6 4.2 4.2 34.8 4.5
OptionsHouse 4.4 4.6 5.0 3.7 4.8 4.7 4.6 2.9 34.7 4.5
TDAmeritrade 4.5 4.7 4.8 3.9 5.0 4.9 4.8 0.7 33.3 4.0
Tradestation  4.5 4.3 4.1 3.9 4.5 4.3 4.8 2.6 33.0 4.0
 Merrill Edge 3.4 4.1 4.7 2.5 4.6 4.7 4.5 3.0 31.5 4.0
TradeKing 3.6 4.1 4.4 3.8 4.3 3.8 4.6 2.7 31.3 4.0
Schwab 3.8 4.4 4.5 4.1 4.6 4.2 4.8 0.9 31.3 4.0
 E*Trade 3.8 4.2 4.6 3.4 4.9 4.0 4.8 0.6 30.3 4.0
Lightspeed 4.4 3.9 3.5 2.1 2.8 2.5 4.3 4.1 27.6 3.5
Scottrade 2.3 3.3 4.1 2.3 3.1 3.1 4.2 1.2 23.6 3.0
SogoTrade 2.9 2.5 2.5 2.7 2.7 2.4 3.7 2.7 22.4 3.0
 eOption 2.5 2.8 3.6 2.4 2.3 1.9 2.8 4.0 22.3 2.5
Firstrade 1.9 2.9 3.9 2.1 2.6 2.9 3.8 1.9 22.2 2.5
TradingBlock 2.6 2.7 0.0 3.2 2.6 1.7 2.9 1.4 17.1 2.0
just2trade 1.4 1.9 3.5 0.7 0.6 1.1 2.6 3.8 15.6 2.0

Brokerage Promotions

Many companies in this article offer incentives for opening a new brokerage account. Some of these broker promotions work only for non-IRA accounts, others - for both IRA and non-IRA accounts:

TD Ameritrade: Trade free for 60 days + get up to $600.

Tradeking: Get $100 in free commissions. No hidden fees. No minimums.

Optionshouse: Trade Free For 60 Days when you Open a New OptionsHouse Account.

USAA: Open USAA Brokerage Account.

Scottrade: Get up to $100 in account transfer fee reimbursed.

Motif Investing: Get up to $150 when you start trading at Motif Investing.

E*trade: 60 days of free trades for deposits of $10k or more.

Firstrade: None

Optionsxpress: None

Capital One Investing: None

Charles Schwab: None

Merrill Lynch/Edge: None

Interactive Brokers: None

Wellstrade: None

Fidelity Investments: None

Updated on 12/16/2016.

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