Some firms are intended for the most advanced traders with years of experience. Other
brokerage companies are designed for beginners, offering various products and services that are designed
to help new investors learn the ropes. Two of these best brokerage firms for beginners are
Firstrade and Charles Schwab. Here’s what they have to offer:
Pricing
| Broker Fees |
Stock/ETF
Commission |
Mutual Fund
Commission |
Margin
Rate |
Maintenance
Fee |
Annual IRA
Fee |
|
Charles Schwab
|
$0
|
$49.95 ($0 to sell)
|
12.825%
|
$0
|
$0
|
|
Firstrade
|
$0
|
$0
|
13%
|
$0
|
$0
|
Services
| Broker Review |
Cost |
Investment Products |
Trading Tools |
Customer Service |
Research |
Overall Rating |
|
Charles Schwab
|
|
|
|
|
|
|
|
Firstrade
|
|
|
|
|
|
|
Promotions
Charles Schwab: $0 commissions + satisfaction guarantee at Charles Schwab.
Firstrade: Get 2% IRA match and up to $250 in transfer fee rebate.
Education
Starting with Firstrade, we find educational materials that are conveniently divided into
categories in the top of the website.
Complete newbies should start with the Education tab. Underneath this tab, there are several selections. Overview is a good place to begin. This hub displays all available educational resources under the Education tab. There are learning materials on the following investment vehicles:
- Stocks
- Options
- ETFs
- Mutual Funds
- Bonds and other fixed-income securities
There is an article on the Education Center that explains how margin works. And what we really like the most on this page is a link to an investment glossary. There are hundreds of terms that new traders probably won’t be familiar with that are defined in simple terms.
At the bottom of the Education Center is a collection of videos and recorded webinars. These cover a variety of topics that beginners will find useful. Examples include:
- Options wizard basics
- Fund an account
- ETF basics
- Placing stock trades
Services
So far, we have covered a lot of territory, and these resources are under just one tab. Moving to
the Service tab on the Firstrade website, we find a treasure trove of resources that beginners
will definitely want to check out.
First up is a Help Center. This page has articles on a variety of topics, such as taxation of brokerage accounts and withdrawing funds. There is a search bar at the top of the site that can be used to scan these articles by keyword.
There is also a Contact Us page underneath the Service tab. This page displays all the available methods to reach a customer service rep. Firstrade has a fax number, phone service during the weekday, and an email form.
One final hub found under the Service tab is the Form Center. This resource has a long list of forms divided into categories. Some are in pdf format, while others have online forms. This is a useful place to visit. On the Form Center, there is also a document upload tool that can be used to upload a form.
The Home tab hosts a variety of resources that new investors will find useful. These include news articles, a list of quick links (such as market holidays and transferring funds), and advertisements of upcoming webinars.
Research
Firstrade has very good security research materials, thanks to a partnership with Morningstar. This third-party analyst is one of the most trusted security analysts in the business, and much of its research is available free of charge at Firstrade.
This information will be found under the Research & Tools tab. Every stock, ETF, and mutual fund has a profile with details from Morningstar. Some of the more popular securities have star ratings and price targets.
Besides in-depth profiles, Firstrade offers screeners to actually search for investments. The Screeners link is under the Research & Tools tab. Mutual funds, exchange-traded funds, and stocks have their own screeners. These are easy to use, so beginners will find them useful. Results can be sorted by a variety of criteria, and it’s easy to get to an asset’s profile (just click on the ticker symbol in the search results).
Last, but certainly not least, is the Analyst Research page. The link for this valuable resource will also be found under the Research & Tools tab. There are many reports in pdf format that are linked on this page. And a search bar makes finding reports for specific funds or stocks easy (just enter a company name or ticker symbol).
Firstrade Review
Review of Firstrade Account »
Free Firstrade Account
Get 2% IRA match and up to $250 in transfer fee rebate.
Visit Firstrade Website
Customer Service
One of the first things newbies need is customer support. Charles Schwab certainly delivers in this realm with several avenues of help. On its website and mobile app, there are help pages with links for various services, including phone and chat support. Both channels start in robo mode, although it’s possible to bring a human rep on board. Because Schwab’s customer-service department is open 24 hours a day, 7 days a week, an associate can be contacted around the clock.
Both the website and mobile app have messaging widgets for issues that can wait but need attachments of documents. For issues that can’t be handled online or over the phone, there is Schwab’s branch network. The brokerage firm has brick-and-mortar offices around the country. At last count, there were a few hundred of them. They’re a great way to get some old-fashioned in-person service.
Managed Accounts
Beginners who need some assistance making investment decisions will find much to like about Charles Schwab. Besides all of its self-directed trading resources, the company also has a very extensive investment-advisory branch. This department of the firm provides investment advice, portfolio management, and financial planning, all at very reasonable prices. Intelligent Portfolios® is Schwab’s robo program that makes investment decisions in an account using a computer algorithm. It is free.
Novices who prefer a more complete financial-management program can find human advisors through other investment-advisory packages. These traditional, full-service programs deliver a lot more than a computer program can provide. Examples of services Schwab can provide in these old-school programs include estate planning, insurance advice, customized financial plan, charitable giving, and tax assistance.
Schwab clients who find themselves looking for something in between these two realms have a hybrid option. Intelligent Portfolios Premium® is an advisory service managed by a computer program that comes with free consultations with CFP® professionals.
Free Charles Schwab Account
$0 commissions + satisfaction guarantee at Charles Schwab.
Visit Schwab Website
Education
Rookies who decide to forgo the investment-advisory options and go it alone will find plenty of assistance through Schwab’s very extensive investment library. On both its website and mobile app, there is a treasure trove of financial education that both beginners and seasoned pros will find helpful.
Not surprisingly, a good place to begin is on the broker’s website under the Learn tab. Here, we found all kinds of resources that beginning investors will find helpful. Examples include:
- Self-guided courses on all kinds of topics
- Onward magazine, a quarterly financial publication from Schwab
- Podcasts
- New client welcome center
- Live broadcast and on-demand videos from Schwab Network
- Market commentary
- Tax center
- Planning and retirement tools
And that’s just the Learn tab. There’s much more under the Products and Research tabs. There are calculators, security research tools, news on markets and products, planning resources, and the list goes on.
Complimentary Financial Plan
Self-directed traders at Schwab who didn’t get a financial plan through the company’s advisory channel can get one anyway. Like many of Schwab’s other services, this one is free of charge. The link to sign up for this great service is on the financial-planning page, which can be found under the Products tab.
Paper Trading
Once the necessary education and financial roadmap are complete, Schwab steps up to the plate once again. This time, it delivers simulated trading, which is the next step on the trading journey. Before putting real money on the line in a self-directed account, it’s a good idea to practice the myriad trade types just to prevent any mistakes in live trading.
Schwab’s desktop platform, Thinkorswim, has a demo mode that provides this practice environment. There’s no charge to use this simulated system, and it has all the same tools that Edge has in live mode. To use the simulated program, just check the box on the login window for the demo mode. It’s possible to practice trading outside of regular hours, which is super convenient. It’s a great way for novices to get some experience trading with zero risk.
Research Tools
The final piece of the puzzle is to find something to trade. Newcomers will find user-friendly research tools on Schwab’s website (under the Research tab, conveniently enough). There are security scanners for stocks, options, bonds, and funds (exchange-traded and mutual). These digital search wizards are really easy to use, which is why we’re recommending Schwab here for beginning investors.
Free Charles Schwab Account
Review of Charles Schwab Account »
Charles Schwab Promotion
$0 commissions + satisfaction guarantee at Charles Schwab.
Visit Schwab Website
Updated on 11/28/2024.
Chad Morris is a financial writer with more than 20 years experience
as both an English teacher and an avid trader. When he isn’t writing
expert content for Brokerage-Review.com, Chad can usually be found
managing his portfolio or building a new home computer.
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