Is Sogotrade a Scam? Is Sogotrade Safe and Legitimate Brokerage Company, IRA? Sogotrade BBB Rating.


Is Sogotrade Safe?


We are often being asked the following questions: is Sogotrade a fraud? Is it safe to use, to keep money and investments at Sogotrade? Is account SIPC/FDIC insured? The short answer - Sogotrade is a legitimate brokerage firm. But the company had some problems when we reviewed it, especially with trading tools and customer service - we do NOT recommend opening account there. It also has F rating from BBB and a lot of negative user reviews: you can read them in our 2017 Sogotrade Review under this link.


Is Sogotrade Insured And Regulated?


Sogotrade is a division of Wang Investments which is an online deep discount brokerage firm. The firm is also helping individuals establish retirement plans. Wang Investments, registered as a Broker/Dealer with the Securities and Exchange Commission (SEC), is a member of the Financial Industry Regulatory Authority (FINRA) and Securities Investors Protection Corporation (SIPC).


Sogotrade BBB (Better Business Bureau) Rating


Sogotrade's Better Business Bureau rating is the worst possible - F. Below you could see the breakdown of customer complaints.

Total Closed Sogotrade Complaints - 12: Problems with Product/Service - 9, Advertising/Sales Issues - 1, Billing/Collection Issues - 1, Delivery Issues - 1.


Sogotrade Review


SogoTrade offers very low stock and ETF commissions - just $5 per trade on stocks and ETFs priced over $1. However, it is extremely expensive to trade with the firm stocks priced below $1 as well as making any stock trades during extended hours. Options traders get very good $5 plus 50¢ per contract pricing, which is matched by a higher rated brokerage firm called Ally Invest.

Mutual funds investors get about average rates: no load mutual funds cost $25 per transaction. Ally Invest and OptionsXpress both offer much lower rates at $10 per trade. At Sogotrade mutual funds could be bought or sold only by calling customer service (no online trading). There are over 12,000 mutual funds available for investing at the firm, but out of these only 343 are NTF (no transaction fee) funds.

Read full Sogotrade Review »



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Acquisition By ETRADE


UPDATE: ETRADE Securities (review), which acquired OptionsHouse last year, plans to fully integrate OptionsHouse and discontinue the brand in August of this year. For this reason it makes more sense to open an account with ETRADE directly and skip possible transition inconveniences.


Besides low fees and commissions, OptionsHouse also offers Individual Retirement Accounts. An IRA with the firm comes with the same great pricing schedule as a regular brokerage account. Nonetheless, there are certain areas when the broker falls short in the retirement category compared to several of its rivals. Let’s make a detailed analysis of OptionsHouse’s retirement selections, and see if opening an IRA with the broker would be a wise move.


Varieties of IRA’s


There are four IRA types that OptionsHouse offers. These are Roth, Traditional, Rollover, and SEP accounts. The Roth is designed for retirement savers who expect to be in a higher tax bracket after work, while the Traditional is intended for those who expect the opposite. The Rollover account is a good option for people who have an employer-sponsored retirement plan and would like to convert it to an IRA. Finally, the SEP IRA is designed for small businesses.


Account Minimums and Fees


A retirement account at OptionsHouse can be opened with no deposit. There is also no annual fee, no inactivity fee, and no maintenance fee of any kind. The broker does not charge anything for a low balance. It’s a very simple fee structure.

However, when you’re finished with your IRA, OptionsHouse has a few surprises for you. Closing a retirement account costs $60, and transferring a full account carries a $75 fee. Partial transfers cost $25.


The Cost of Trading


The broker’s pricing schedule applies to retirement and non-retirement accounts alike. This includes $4.95 trades for stocks, options, and ETF’s. There is an additional 50¢ charge for each option contract in a trade.

OptionsHouse has representatives who can help clients submit an order over the phone. Using this service tacks on an extra $25.

Penny stocks are available at OptionsHouse, but the broker imposes a 0.05¢ surcharge per share. Equities priced above $1 are exempt.

Option exercises and assignments are charged at the broker’s regular $4.95 commission.


Mutual and Exchange-traded Funds


All US-listed ETF’s are available at OptionsHouse. The broker does not offer any commission-free; although at just $4.95 per trade, infrequent traders will find a good value here. Unfortunately, OptionsHouse doesn’t have in-depth information on ETF’s.

Much worse is mutual funds. The broker doesn’t place any emphasis on these securities, so there is virtually no information on them. There is no OptionsHouse mutual fund screener, and the website doesn’t have any educational materials for mutual fund investors. There are no NTF funds, either. However, all mutual fund transactions at OptionsHouse cost low $20.

Another advantage of the broker’s fund offerings is that short-term redemption fees won’t be found here. Investors can trade funds as frequently as they wish without paying any fees (to OptionsHouse) for doing so.

Target-date mutual funds are available at OptionsHouse. These securities are designed for long-term retirement savers. As the target date approaches, the fund’s portfolio becomes more conservative by shifting investments from higher-risk assets into fixed-income products. As mentioned above, transactions are $20 each, but there are some funds that have no load. A few of the available fund families include Vanguard, T. Rowe Price, and JP Morgan Chase.


IRA Tools, Calculators, and Education


Retirement education is on the slim side at OptionsHouse. There are no IRA videos or articles on the broker’s website. Investors will not find a single retirement calculator on the OH site. There are no planning or learning tools available to the broker’s clients. While retirement customers can receive low fees at OptionsHouse, they won’t find much guidance.


Trading Futures in an IRA


While the broker seems rather weak in research and education, one advantage of an OptionsHouse IRA is the ability to trade futures. The brokerage house is one of the few in the industry to offer futures contracts in addition to the normal range of securities. Investors who want to trade futures must submit a separate application form.

As with securities, OptionsHouse provides low commissions for futures traders. One contract is just $1.50 per trade.


Technology


Both securities and futures can be traded on the broker’s very nice desktop platform. Even better, the software carries no account minimums or trading requirements. In fact, the website does not have any trading capability. It is used primarily for account management, providing broker information, hosting FAQ’s, and so forth.


Updated on 7/3/2017.




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