E*Trade Assets Under Management
One of the smaller firms in the large-size category is E*Trade Financial, which incorporates both brokerage and
banking activities. The company has 4,200 employees and 30 branch locations.
E*Trade has the following details:
| Assets under management (retail) |
$420 billion |
| Assets under management (corporate) |
$380 billion |
| Revenue |
$2.86 billion |
| Number of retail brokerage accounts |
5.5 million |
| Number of corporate services accounts |
2 million |
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E*Trade and Competitors
Pros and Cons of a Mid-size Broker
E*Trade isn’t large enough to manage its own suite of mutual or exchange-traded funds. So it offers funds from other companies. Some investors may prefer a large enough broker that offers its own funds at a discount to its brokerage customers.
E*Trade is big enough to provide investment advice and portfolio management. A robo-advisory service starts
at 30 basis points.
Etrade New Account Setup
Etrade new account online registration takes around 10 minutes to complete. It is well-organized, though the forms are not as clean-looking as they can be.
The company offers several sweep options (where your money is held until you invest it) and the default is the
E*TRADE Financial Extended Insurance Sweep Deposit Account, which offers tiny daily interest and FDIC insurance up to $1,250,000.
Other sweep options do not specify what interest (if any) they provide.
The company gives customers access to free debit card and check writing, although a minimum balance of $1,000 is required for that.
What we also like is that right away all documents are set to electronic delivery, and there is a $2 fee for each document the
customer chooses to have delivered through regular mail - let's not forget about environment.
After we finished the application, we were given four options for funding an account: wire (1 business day), ACH (3 business days), check (5 business days)
and account transfer (8 business days). We chose ACH, completed the bank information, and clicked the submit
button. A message appeared saying "You have requested access to a customer-only feature". This is apparently an error and it is definitely confusing to users.
But when we
logged in into our new account, everything was fine - all the information has been saved.
Funds deposited through ACH will appear to be available almost immediately - the Net Account Value on the main Etrade screen will show
the transferred amount. But in reality it will become available for trading three business days later. A customer service representative will call
on that day and offer assistance.
Etrade minimum deposit to open an account is $0 for IRA accounts and $500 for all taxable accounts. Margin accounts with all brokers require
at least $2,000 initial deposit.
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Etrade Mutual Funds Review
Slightly more than 9,000 mutual funds are available to buy and sell on the Etrade website. Approximately 6,300 have no transaction fee, and more than 4,400 have
neither transaction fee nor load. Using Etrade's advanced screener helps to narrow down some of the fund choices. Pre-defined screens, such as actively managed
funds, are available. Users can also search according to asset class, Morningstar rating, distribution yield, fund category, and expense ratio. The broker's
website presents detailed information on each fund, including fees, performance history, ratings, and portfolio composition. Charting for mutual funds is also
very advanced and includes technical studies.
Different funds have different minimum purchase amounts. Some funds have a $0 minimum. Required initial purchase amounts for funds in an IRA also vary. Etrade
doesn't charge anything for mutual funds with a small balance. However, there is a $19.99 charge for transaction-fee funds. The fee is applied
to purchases, sales, and exchanges.
IRAs
Etrade offers many different types of IRAs. These include Traditional, Roth, Rollover, OneStop Rollover, SEP, SIMPLE, IRA for Minors, a Beneficiary IRA
(in Traditional and Roth formats), and a Complete IRA. This selection is one of the largest in the industry.
An Etrade IRA has no setup fee, no inactivity fee, and no annual fee. Even better, there is no minimum to open a retirement account with the broker. However,
there is a $25 fee for early withdrawals. There is also a $25 fee for removing excess contributions. A final $25 fee is for recharacterizations, such as when a
Roth conversion is switched back to a Traditional.
Investors will find many IRA resources on the Etrade website. For instance, there is a useful Rollover IRA tool that leads users step-by-step to decide if
changing an employer-based plan to an IRA is a good idea or not. There is also an inheritance tool that determines if an estate should be converted into an IRA.
A handy required minimum distribution calculator estimates the amount that must be withdrawn, if any, from an IRA in a certain tax year. Besides IRA calculators,
the broker also provides articles, videos, and web seminars on retirement topics.
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