Firstrade

Firstrade vs Charles Schwab, TD Ameritrade, Vanguard and Etrade



Firstrade vs Competitors


Five brokers that hold billions of dollars in client assets and are fierce competitors are Firstrade, E*Trade, Schwab, TD Ameritrade, and Vanguard. They all have their own unique advantages and disadvantages for traders. This survey will compare the four against each other, and see if one can be considered the best broker.


Firstrade vs TD Ameritrade and Others - Fees


Broker Fees Stock/ETF
Commission
Mutual Fund
Commission
Options
Commission
Maintenance
Fee
Annual IRA
Fee
Firstrade $0 $0 $0 $0 $0
TD Ameritrade $6.95 $49.95 $6.95 + $0.75 per contract $0 $0
Charles Schwab $4.95 $76 ($0 to sell) $4.95 + $0.65 per contract $0 $0
Etrade $6.95 $19.95 $6.95 + $0.75 per contract $0 $0
Vanguard $7-$20 $8-$35 $20 + $1.00 per contract $20* see


Fund Offerings


Mutual and exchange-traded funds are available at all four brokerage firms. E*Trade clients have access to 8,496 products that are open to new investors. Of these, 4,411 carry no transaction fee and no load. Funds with a transaction fee cost $19.99 for both sales and purchases. The broker offers 146 ETF’s that are free to trade.

TD Ameritrade provides nearly 12,000 mutual funds that are available for purchase. Almost 4,000 of them are no-load, no-transaction-fee products. The broker does impose a rather steep $49.99 surcharge on transaction-fee funds, and it’s applied on both ends. There are 296 commission-free ETF’s at TD Ameritrade.

The Schwab mutual fund screener returns 5,573 securities that are available for purchase by new investors. There are 3,457 that have neither load nor transaction fee. A rather expensive $76 charge is applied to transaction-fee funds, but the broker does not assess it against sales. Schwab traders have access to 245 ETF’s that don’t have any commissions.

Vanguard boasts 16,000 mutual funds for its clients. About 2,400 come with no transaction fee and no load. If a fund isn’t on the company’s NTF list, there is a $35 charge for every transaction. Like Schwab, Vanguard manages its own mutual and exchange-traded funds. Unlike Schwab, Vanguard only provides Vanguard-branded ETF’s commission-free. There are 55 of them.

Firstrade has a fairly robust mutual fund screener that allows its users to screen by numerous variables such as YTD returns, total number of assets, and minimum possible purchase. Of the 8,340 securities, 3,412 are no load securities. ALL (!) ETF’s are available for trading free of commission.


Managed Account Options


All of the brokerage houses in our survey offer both self-directed and managed accounts. Vanguard is the lone broker not to have a robo-advisory package, but nevertheless manages to keep costs down. Its portfolio management service costs just 0.30% annually, which is really cheap for this type of service. There is a $50,000 account minimum, however.

TD Ameritrade offers both computerized and traditional accounts. Its robo service costs 30 basis points with just a $5,000 minimum. Human advisors are more expensive (75 to 125 basis points) and require $25,000 to start.

Schwab has thrown down the gauntlet in this category by offering a robo service free of charge. Called Intelligent Portfolios, the managed account only requires a $5,000 minimum. Like most computerized services, it invests in low-cost ETF’s. The service has been criticized for having above average cash positions and investing in funds that have a relationship with Schwab. Traditional management is available and costs between 20 and 135 basis points, depending on the investment strategy chosen. Minimums are between $25,000 and $100,000.

E*Trade’s robo-advisory service has a $10,000 minimum, although retirement accounts get a $5,000 reduction. Called Adaptive Portfolio, the broker charges 0.30% for the service, and the first six months are free. Several human managed packages are also available at E*Trade. Minimum investments range from $25,000 to $250,000, and the asset-based fee varies from 125 to 35 basis points.


Customer Support


Vanguard is the only broker in this competition not to provide customer service around the clock. It also doesn’t have any associates available during the day on Saturday and Sunday. The other three brokers have representatives on the phone 24 hours a day, 7 days a week. Vanguard is also the only firm not to manage a nationwide network of branch locations.

In addition to phone service, E*Trade also offers a convenient on-line chat feature. The company’s website has some handy self-help features, such as an easy-to use wire transfer form. E*Trade recently closed its on-line community. Investors who need in-person service will find it at any of E*Trade’s 30 branch offices located in 17 states.

TD Ameritrade manages over 100 brick-and-mortar locations. It doesn’t offer on-line chat, although there is a robot named Ted that can answer questions that are typed into a Q&A window. The broker’s website has a lot of self-service features, including a welcome center and a page where account forms can be downloaded.

Schwab traders will find service over the phone, through on-line chat, or at one of the company’s 325 branch locations. Most states have at least one office. The Schwab website provides several self-help features, such as notification preferences and tax withholding settings.

At Firstrade telephone service is available from 8:00 a.m. to 6:00 p.m. EST Monday through Friday. During these same hours, there is also the option to chat with a live agent online, even for those who speak Cantonese or Mandarin. Traveling outside the U.S. should be no problem as Firstrade offers international numbers and the ability to receive a call directly from a Firstrade agent. Fax, mail, and email is also an option.


The Cost of Trading


Vanguard has a variable commission schedule, while the other three firms have simple, flat pricing. Traders at Vanguard pay anywhere from $0 to $20 for stock trades. Accounts with fewer than $50,000 invested in Vanguard funds pay $7 for the first 25 equity trades in a year, and then all trades thereafter cost $20 each. Customers with higher balances receive better rates. Vanguard does not have a minimum opening deposit requirement, but it does charge a $20 annual account fee. It can be waived by signing up for e-delivery of documents.

TD Ameritrade clients pay $6.95 for equity transactions. The broker doesn’t have any opening deposit requirement, nor does it impose any on-going account fees. Paper statements are $2 each for accounts smaller than $10,000.

E*Trade also charges $6.95 for stock trades. Investors who place at least 30 trades per quarter receive a $2 discount. Customers who trade at this level also receive free paper statements. Other clients pay $2. Electronic delivery is available at no charge. E*Trade has a $500 minimum opening deposit requirement for taxable accounts, but it doesn’t charge an annual fee.

Schwab traders pay just $4.95 for stock transactions. There are no discounts for any class of customer. The broker does require $1,000 to open a securities account. There is no annual account fee at Schwab, and paper statements and confirmations are always free.

Firstrade is easily the best priced broker out of five. Their stock and ETF commission is $0. Options are $0. Mutual funds now also cost $0 per transaction. There are no annual or inactivity fees. Real-time quotes, DRIP service, and electronic statements are free. A brokerage account can be opened with no deposit.


Technology


Vanguard is the only brokerage firm in the contest not to offer a desktop platform. E*Trade is the only broker to require a minimum level of trading (30 transactions per quarter) to gain access to its software. The broker also has a simple web-based trading environment called E*Trade 360, which is free for all clients. Schwab and TD Ameritrade customers receive desktop trading programs with no account requirements.

TD Ameritrade actually provides two trading systems: Trade Architect and thinkorswim. The former is a simple browser-based system that would be good for beginners. Thinkorswim is a desktop program and the most advanced program in the survey, with hundreds of charting tools. In addition to securities, forex and futures can be traded on it.

Schwab and TD Ameritrade are the only two brokers that provide website trading bars. Both of them sit at the bottom of the browsing window. TD Ameritrade’s is more sophisticated than its rival’s. Orders cannot be placed directly on Schwab’s trade bar.

Firstrade’s website is very user-friendly. A trade bar at the bottom of the screen may be used to complete many tasks including gathering information on securities’ spreads, volumes, price etc. Orders involving limits, trailing, stops, and more can be made right from the trade bar. There is a built-in options feature that makes viewing options change and making put/call orders a breeze.

All five brokers provide mobile apps. Only Vanguard and Firstrade fail to provide a smartwatch platform. Live streaming of CNBC is available with Schwab, E*Trade, and TD Ameritrade, although E*Trade imposes account minimums to gain access to the service. The most advanced charting is on TD Ameritrade’s thinkorswim mobile software.


Banking Features


Cash management tools are available at all brokerage houses. E*Trade and Schwab operate their own FDIC-insured banks, so connecting bank accounts to securities accounts with those firms is quite easy. TD Ameritrade clients can attach checks and a debit card to a brokerage account. These tools are free, and Schwab and E*Trade don’t charge anything, either.

Vanguard has the most expensive service. The broker charges $30 annually for its cash management account. Bill pay is $4.95 per month for most traders, and checkbook reorders are $9.95. Only customers with at least $500,000 deposited in Vanguard funds are eligible for banking features. Accounts with more than $1,000,000 in assets receive discounts on some services.

Schwab reimburses all ATM fees incurred worldwide, with no limits. One of E*Trade’s checking accounts also reimburses ATM charges, but this account has a $5,000 minimum to avoid a monthly fee, which Schwab doesn’t charge. TD Ameritrade reimburses ATM surcharges incurred inside the United States.

Firstrade offers an optional investment checking account for no charge. Here, users can invest directly from the same account they make debit or check purchases from. This account requires a minimum deposit of $25k and will charge the users 3% for all OUS transactions.


Promotions

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

Firstrade: $0 commissions + up to $200 in transfer fee rebates.

E*Trade: At E*TRADE, get $6.95 trades + 65₵ per options contract.

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

Vanguard: None



Recommendations

Firstrade is our recommended broker for anyone looking for lowest pricing on all investments.

TD Ameritrade is an excellent firm for the majority of regular investors who want the security and a rich selection of services of a large brokerage house without paying higher than average fees. Cutting edge trading platform, superior selection of independent investment research, and a "paper" trading (trading with virtual money) environment, earn TD Ameritrade a recommendation for IRA accounts and active investors.

Vanguard is highly recommended for anyone who wants to invest mostly in Vanguard-family mutual funds and ETFs.

Etrade is our suggestion for investing in various bond securities.

Charles Schwab is a great broker for long term investors.