Barron's online broker ratings, reviews, rankings, and comparison for 2017

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

Barron's Broker Survey Overview

The financial publication Barron’s has already reviewed brokers for 2017, and the results shed important light on the industry. Fidelity was awarded first place, while Just2Trade rounds out the bottom of the list. Surprisingly, E*Trade performed poorly. Let’s take a detailed look at the Barron's broker rankings and see which firms deliver the best value.

Brokerage Environment

The U.S. stock market has seen record highs so far in 2017, further increasing interest in trading securities. Despite the surge in equity prices, commissions at many brokerage firms have actually fallen. Barron’s estimates the cost of trading has gone down by about a fourth for the average investor. Less expensive trading combined with a surging stock market means more profits for traders. It’s a good time to have a brokerage account.

Fidelity Takes First Place in the Overall Category

Receiving 4½ stars out of 5, Fidelity (read review) was awarded first place. Despite lowering its stock and ETF commission to $4.95 earlier in the year, the broker only received 2½ stars in the cost category. Apparently, its IRA closeout fee, mutual fund transaction fee, and other charges reduced its overall value.

Categories where Fidelity performed well include Portfolio Analysis & Reports, Research Amenities, and Mobile. Barron’s also liked Fidelity’s consistently good customer service and its commitment to providing access to global markets.

The broker’s technology also caught the attention of the financial publication. A new ETF screener with technical analysis tools earned Fidelity high marks. The fact that the firm now has 91 ETF’s trading commission-free also helped the broker reach the top spot.

Interactive Brokers is a Close Second

Frequent traders actually will pay less on a monthly basis at Interactive Brokers (read review). Barron’s also liked the firm’s portfolio analysis tools, its equity reports, and its range of offerings, where it actually outperforms Fidelity.

Barron’s commented favorably on Trader Workstation, IB’s flagship trading platform. A new addition this year is iBot, an artificial intelligence that can answer questions in English. The newspaper also liked IB’s range of robo-advisory portfolios. They include not just ETF’s, but stocks also. The most expensive option is just 0.08%.

Merrill Edge at Four Stars

Barron’s admired Merrill Edge’s improvements on its mobile platforms. Charting and order entry are now more user-friendly, and the broker’s app includes education and research capability. Morningstar will soon be incorporated as well.

The broker’s increased emphasis on options trading improved its overall performance this year. Barron’s also gave it top marks for stock reports and portfolio analysis tools.

E*Trade Fails to Impress

In eighth place is E*Trade. Despite lowering its equity commission to $6.95 this year, and reducing its frequent trader definition from 150 transactions per quarter to just 30, Barron’s was not overly excited with the broker’s lineup.

The brokerage house performed poorly in Range of Offerings. Its cost effectiveness was also viewed as poor. Nevertheless, Barron’s commented favorably on the revamped E*Trade website and the new charting tools available to its clients. Another strong point at E*Trade is new syncing between the desktop platform and the mobile app.

Firstrade Near the Bottom

Firstrade actually performs better than E*Trade in the cost category. With a new $4.95 commission, the broker will attract cost-conscious traders. Nevertheless, Firstrade performed poorly in other categories, including Range of Offerings and Technology.

Trading activity on Firstrade’s mobile app has grown, and the broker expects the platform to see a larger share of trades in the future. This flurry of activity has prompted the broker to start working on a new mobile platform.

Best Brokers for Unique Categories

Barron’s also looked at special groups of traders, such as long-term investors and beginners. Some of the results were a little surprising. For in-person service, Merrill Edge received top honors. This is probably due to its affiliation with Bank of America, as there are many bank locations with a Merrill Edge financial advisor.

Schwab was deemed the best choice for investor education, with Fidelity and TradeStation in the top five. New traders will find the best assistance at TD Ameritrade. Frequent traders will find good values at Interactive Brokers and TradeStation. IB also received top marks for option traders.

Worst Online Broker According to Barron's

Near the bottom of the results is Just2Trade. This broker received high marks for its very low equity commission, but low marks for its lack of mutual funds and fixed-income products. It also performed poorly in the technology category.

TradingBlock received just 1.7 stars out of 5 for Portfolio Analysis & Reports. The broker doesn’t have a mobile app, and its overall technology was judged to be just 2.4. For costs, Barron’s awarded the firm just 0.7 stars.

Differences From 2016

Despite Firstrade’s mediocre showing this year, it actually did better than last year, when it received a score of 2½ for overall performance. This year the broker was at 3 stars.

Scottrade and Ally Invest were noticeably absent this year. Scottrade did not participate because of its upcoming merger with TD Ameritrade. And Ally Invest (read review) didn’t have time due to its purchase by Ally Financial.

OptionsHouse dropped half a star from 4½. Its costs went from 2.9 stars to 2.6. More stars mean lower fees. The broker’s mobile app also performed more poorly this year, compared to 2016. In the category of Research Amenities, OH also dropped from 4.8 to 4.3.

Barron's Online Broker Rankings Chart

Below you could see the comparison chart of 2017 Barron's annual online brokers review, along with broker ratings and rankings.

Broker Trading
and Tech
Mobile Range of
Portfolio Analysis
and Reports
Client Service Costs Total Stars
Fidelity 4.7 4.6 4.9 4.3 4.9 4.9 4.8 2.5 35.6 4.5
IBKR 4.7 4.4 4.3 4.7 4.4 4.9 3.9 4.2 35.5 4.5
TDAmeritrade 4.7 4.7 4.9 4.2 4.8 4.9 4.8 1.1 34.1 4.5
OptionsHouse 4.5 4.6 4.8 3.9 4.3 4.7 4.3 2.6 33.7 4.0
Schwab 4.2 4.4 4.5 4.1 4.8 4.4 4.9 2.2 33.5 4.0
 Merrill Edge 3.7 4.2 4.8 3.0 4.8 4.7 4.6 2.4 32.2 4.0
Tradestation  4.4 4.3 4.2 3.1 4.5 4.3 4.6 2.4 32.2 4.0
 E*Trade 4.2 4.5 4.7 3.3 4.7 4.0 4.6 1.1 31.1 4.0
Tradier 2.8 4.4 3.7 3.1 3.6 3.4 2.9 4.0 37.9 3.5
Lightspeed 4.1 3.9 3.7 2.4 3.0 2.5 3.7 3.5 26.8 3.5
SogoTrade 2.9 2.8 2.6 3.0 3.0 2.2 3.5 2.3 22.3 3.0
 eOption 2.8 2.8 3.7 1.9 2.2 2.1 2.3 4.0 21.8 3.0
Firstrade 2.0 2.9 3.5 1.9 2.8 2.9 3.4 2.2 21.6 3.0
just2trade 1.5 2.4 3.3 1.1 0.8 1.4 2.6 3.6 16.7 2.0
TradingBlock 2.4 2.7 0.0 3.4 2.7 1.7 2.7 0.7 16.3 2.0
Planner Sec. 1.4 2.8 3.6 1.8 0.7 1.5 2.3 1.5 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.

Ally Invest: Get a $100 cash bonus or $500 in commission-free trades with Ally Invest.

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

Charles Schwab: Make $100,000 deposit and get 500 commission-free online equity and options trades.

Fidelity Investments: Get 500 free trades with $100,000+ deposit.

Firstrade: Up to $1,000 in free trade commissions for 60 days.

Capital One Investing: Get $50 when you open new non-IRA account at Capital One Investing.

Merrill Lynch/Edge: Get up to $600 when you open new Merrill Edge account with at least $20,000.

E*trade: At E*TRADE, active traders get $4.95 trades + 50₵ per options contract.

Motif Investing: None

USAA: None

Interactive Brokers: None

Wellstrade: None

Updated on 3/28/2017.

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