Charles Schwab vs Wells Fargo


2019 Wells Fargo Wellstrade versus Charles Schwab - which is better? Compare IRA/Roth accounts, online investing fees, stock broker mutual fund rates, and differences.



Introduction


Both WellsTrade and Charles Schwab have affiliations with FDIC-insured banks. The similarities pretty much stop there, however. Brokerage services vary widely between these two firms. We’re going to run these two companies through their paces and find out which one is better - Charles Schwab or Wellstrade?


Commissions


Broker Fees Stock/ETF
Commission
Mutual Fund
Commission
Options
Commission
Maintenance
Fee
Annual IRA
Fee
Charles Schwab $0 $76 ($0 to sell) $0 + $0.65 per contract $0 $0
Wellstrade $5.95 $35 $5.95 + $0.75 per contract $0* $0*
Firstrade $0 $0 $0 $0 $0


Services


Broker Review Cost Investment Products Trading Tools Customer Service Research Overall Rating
Charles Schwab
Wellstrade
Firstrade


Research & Education


Schwab offers its customers a large variety of learning materials. An educational section on the Schwab website hosts many videos and articles on important investing topics, including retirement planning, taxation of securities, and more. Third-party equity reports are available free of charge. Market news from many different sources appears on the broker’s site, and effective screeners are able to search through the securities that Schwab offers.

The WellsTrade site also has market news, although the selection is smaller. There are screeners for stocks, bonds, and mutual funds; although the WellsTrade fund screener has fewer search variables than Schwab’s. Market commentary can be downloaded in pdf format free of charge, as can Morningstar (premium membership discounts) equity reports.


Wells Fargo vs Schwab


Schwab has the better selection in this category.


Trading Tools


The Schwab website has a lot of material on it, but it’s fairly easy to navigate nevertheless. There is a handy trade bar at the bottom of the browsing window. It can display vital trade information for stocks and ETF’s. A small pop-up graph also appears after clicking on ‘Chart’. Clicking on ‘Trade’ produces a separate web page where an order can be placed. For traders who want something more advanced than the website, the broker provides StreetSmart Edge, an advanced desktop platform that only requires a $1,000 account balance.

The WellsTrade site doesn’t have a lot on it, which makes it easy to navigate. There is no trading bar, and the broker doesn’t offer an advanced trading platform. The website does have good charting tools. These include technical studies and multiple chart styles. A graph cannot be displayed the width of the monitor, however.

Schwab wins again.


Schwab vs Wells Fargo


Mobile Apps


Schwab customers can place trades on Apple, mobile web, Kindle Fire, and Android devices. Several useful features are available, including check deposit and bill pay. Live streaming of financial news has returned to the Schwab app after a brief absence. The broker also has a platform for Apple Watch.

WellsTrade does not provide a mobile app for any Amazon device. Also absent is an app for Apple Watch. WellsTrade clients can buy and sell securities on Android and Apple phones and tablets. The broker’s app does come with some basic charting tools and option chains. The app can also place orders for mutual funds.

Schwab wins again.


Commissions, Fees, and Account Requirements


ETF and stock trades at Schwab cost a very low $0. Derivatives are an additional 65¢ per contract. Using a live representative to submit an order over the phone costs $31.95. New issues of bonds and CD’s are priced with a markup and markdown. Secondary issues cost $1 per bond with a $10 minimum per order and $250 maximum. A broker-assisted bond order costs an extra $25.

WellsTrade clients pay $5.95 for stock and ETF trades. The broker provides a $3 discount to customers who are enrolled in Portfolio by Wells Fargo. This program costs $30 per month, or is free with $25,000 in bank deposits. Derivatives at WellsTrade cost $0.75 per contract plus a base charge of $9.95. Most fixed-income products are also priced on a markup/markdown basis at WellsTrade, although U.S. Treasury bonds cost $50 per transaction.

Schwab requires a $1,000 deposit to open a securities account, although opening a Schwab checking account will waive this brokerage requirement. There are no on-going fees for either account.

WellsTrade requires no minimum deposit to open an account. There is a $30 annual fee, although it can easily be avoided by enrolling in electronic delivery of statements.

Overall, the better pricing schedule is at Schwab.


Mutual Funds and ETF’s


The mutual fund screener on Schwab's website shows over 5,000 products that are available for purchase. On this list, more than 3,000 are OneSource securities, which carry no load and no transaction fee. If a fund at Schwab does have a transaction fee, it is $76 on the buy side only. The broker charges a short-term redemption fee of $49.95 if an NTF fund is sold in less than 90 days after purchase.

WellsTrade’s screener shows almost 10,000 funds that are open to new investors. Slightly more than 2,500 have no load and no transaction fee. Some of the available funds are Wells Fargo products. The broker’s transaction fee is $35, and it’s applied on both the buy and sell sides. The broker does not have a short-term redemption fee.

ETF traders have access to over 500+ products at Schwab that come with zero commissions. Many of these also have expense ratios below 50 basis points. WellsTrade offers zero ETF’s that are commission-free.

WellsTrade does have some strong points here. We’ll call this category a draw.


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Cash Management


WellsTrade is owned by Wells Fargo, one of the largest banks in the United States. Nevertheless, the broker-dealer doesn’t have very good banking options. A securities account doesn’t automatically come with cash management tools. Checks and a debit card can be added by request, but there is a $100 annual charge for them.

Schwab also has an FDIC-insured bank. It is much smaller than Wells Fargo, but offers better features. A Schwab checking account comes with free checks and a Visa debit card. The company reimburses all ATM fees incurred with the card anywhere in the world. A Schwab Bank account comes with no annual fee.

Schwab is the better option here.


New Account Promotions


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

Wellstrade: none right now.



Charles Schwab vs Wells Fargo: Which is Better?


Charles Schwab won five categories, WellsTrade failed to win a single category, and there was one tie. Schwab is the winner by a mile. Despite the outcome of this contest, WellsTrade would be a wise choice for mutual fund investors. Value oriented investors can find a better deal at the $0 commission broker, Firstrade.