Review of WellsTrade
WellsTrade isn’t the most popular brokerage firm out there, but it does have some pretty decent investment services, at least in some areas. Can Wells Fargo’s online discount broker top your current firm? Let’s have a look.
Investments and Accounts
WellsTrade has both self-directed and managed account options. For the portfolio management side, there is a robo program called Intuitive Investor®. It costs 0.35% per annum and trades low-cost ETFs with zero commissions. Some Wells Fargo Bank customers get a discount of 5 basis points. In either case, the service has a $5,000 minimum deposit requirement, and licensed human advisors are available over the phone to answer questions and provide limited advice.
Then there’s the old-school package through Wells Fargo Securities. This one delivers a one-on-one
relationship with a traditional human advisor at a Wells Fargo branch location. Fees are based on
account value and assets chosen. You can compare their rates to what the best priced
financial advisors in your area charge.
Investors who are confident enough in their own ability can open self-directed accounts. There are multiple types available, including IRAs, individual and joint taxable accounts, solo 401(k) plans, and Coverdell education accounts.
Self-directed traders will find a moderate selection of tradable assets. They are:
- Fixed-income securities
- Stocks
- Options
- ETFs
- Closed-end funds
- Mutual funds
Unlike managed accounts, self-directed accounts have no ongoing fees of any kind, and no minimums, either.
Cash Management Features
Yes, WellsTrade is owned and managed by Wells Fargo. But that doesn’t mean it has spectacular banking tools, or any at all. Unfortunately, it’s the latter here.
WellsTrade does not offer a debit card or a checkbook. Obviously, it goes without saying that ATM fee refunds are out of the question.
It is possible to link a Wells Fargo checking or savings account to a WellsTrade account and access them with a single login. It’s also possible to access a few banking tools without an actual bank account. These include a free FICO score (updated once a month) and Zelle transfers.
Website Trading
WellsTrade’s website has some basic trading tools. During our investigation, we found the site easy to navigate, owing in large part to the absence of many features.
A good place to begin on the site is in the search field. Located in the upper-right corner of the site, this widget will display a drop-down menu for an entered ticker symbol. Features include a small graph and links for option chains, alerts, more details, and a trade button.
The broker’s order ticket has 4 trade types. They are:
- Market
- Limit
- Stop
- Stop limit
There is an all or none radio button and two time-in-force selections (GTC and day). Options and mutual funds have their own tickets with relevant fields (look for the tabs at the top of the stock trading ticket).
Charts on the WellsTrade site cannot be expanded the full width of the computer monitor, and that’s a major drawback. But there are 7 plot styles, including dot and candlesticks, several drawing widgets, and a handful of technical studies. Up to 30 years of price data can be shown for securities that have that length of history.
Option chains on the WellsTrade site show puts and calls only. There are no spreads of any kind. There are no Greek values or special derivative tools, either, although volume and open interest are shown.
Mobile App
The WellsTrade mobile app has the same duration choices and trade types as its website. Alerts and watchlists make appearances as well. But charting is on a much lower level, having neither drawing tools nor technical indicators.
On the plus side, options and mutual funds can be traded on WellsTrade’s app, two services not always found at all brokers. Plus, there are some banking services on the app, including check deposit.
Brokerage services that are absent that we would like to see in the future include video news, better charting, and more security research tools.
Other Software
Do you want to amplify your trading with a desktop program? You won’t find one at WellsTrade. Want to increase your trading power with a browser platform? Won’t find that, either. The worst part is that these omissions are combined with two very elementary platforms, the only software WellsTrade clients have.
Customer Support
None of WellsTrade’s software platforms have a chat widget, either in robo or human format. There is a self-help section on the website, and here we found a few helpful resources, such as a tax center and a tool to change a password.
For actual human assistance, WellsTrade has representatives available by phone Monday through Friday (8 am till midnight, EST). There are no weekend hours, and just forget about brick-and-mortar locations. (Some Wells Fargo locations do have services for investment advisory clients.)
Pricing Schedule
Like most of its rivals, WellsTrade now charges $0 for stock and ETF trades when they are placed online or through the broker’s automated phone system. Using a live stock broker over the phone to place a trade costs $25.
Penny stocks (defined as anything below $1) carry a trading fee of $34.95 or 3.5% of principal, whichever is greater. As with regular stocks, there is a $25 surcharge for using a live rep to place a trade.
Trades of mutual funds don’t have this $25 surcharge, so they are the same price whether traded online or over the phone with an agent. Funds with transaction fees are $35 on each side (buy and sell).
Although WellsTrade has eliminated commissions from stock and ETF trades, it unfortunately still has a base charge for option trades. It is $5.95. The per-contract fee is 75 cents.
Using a living, breathing agent over the phone to place a derivative trade tacks on a $25 charge. Exercises and assignments can only be done over the phone with a broker, so they carry the additional charge.
WellsTrade does assess a $35 annual fee against some accounts, although it can easily be avoided by signing up for electronic delivery of account documents.
Margin Borrowing
Most WellsTrade accounts are eligible for margin borrowing. The brokerage house charges margin rates on a tiered schedule. Currently, the sliding scale ranges from 13.75% (for debits below $25,000) to 6.25% (for debits above $10 million).
Households with sufficient assets do get discounts on the broker’s margin rates. A household is defined as accounts with the same address or ownership. A household with at least $250,000 in assets currently is eligible for a discount of 50 basis points. Larger balances qualify for larger discounts, reaching a maximum of 2.5%.
Research and Education
On the WellsTrade site, we found screeners for most of the investment vehicles the broker offers: equities, bonds, mutual funds, and ETFs. There are no screeners for closed-end funds or options.
The broker’s screeners can be found under the Research tab in the top menu, and it is this tab where most other educational resources will be found.
WellsTrade’s equity screener is available in basic and advanced modes. Obviously, the second version has more criteria, but this higher-level mode still has many search variables missing.
WellsTrade’s mutual fund screener does a better job of providing lots of criteria. These include:
- Fund family
- Standard deviation
- Turnover ratio
Under the Research tab, there is a Commentary & Strategy section. This is where a lot of articles in pdf format will be found. They tend to focus on recent market trends. Examples include:
- S&P 500 slides for a fifth straight day
- FOMC Meeting Key Takeaways
And some articles focus on specific investments:
- Dynamic Growth Equity List: Holdings by Sector
- Recommended Closed-end Funds by Asset Class
These types of articles are usually published by the Wells Fargo Investment Institute.
News articles will also be found under the Research tab. We found articles by GlobeNewswire, the Associated Press, and PR Newswire.
Market news includes data on stock indexes, futures contracts, forex pairs, and interest rates. As already noted, not all of these products are tradable with a WellsTrade account.
Stock profiles at WellsTrade have trade recommendations and pdf reports from Morningstar and Wells Fargo Securities. There’s also a Consensus Rating from multiple analysts.
Miscellaneous Services
DRIP Availability: WellsTrade customers can enroll both ETFs and stocks for automatic dividend reinvesting. They have to call in, however, because the broker-dealer doesn’t have an online enrollment tool.
Initial Public Offerings: IPOs will not be found at WellsTrade. We recommend
Webull.
Fractional Shares: WellsTrade continues offering only whole-share trading for stocks and ETFs.
Recurring Mutual Fund Purchases: As with dividend reinvesting, this service is available via phone enrollment.
Extended Hours Trading: The broker does NOT offer the pre-market session. There is after-hours trading from
4:01 pm till 6:30 pm EST. It is available only on mobile.
Individual Retirement Accounts: SEP, SIMPLE, Roth, and traditional accounts are available at WellsTrade. What we don’t like is a $95 closeout fee.
Recommendations
Retirement Savers and Long-Term Investors: On top of its IRAs, WellsTrade also has solo
401(k) accounts and profit sharing plans. Its robo and old-school management services would be
good choices for retirement planning, and we do like its selection of target-date mutual funds.
Beginning Investors: Novices will find much to like about WellsTrade’s robo service, not
least of which is free phone calls with licensed investment advisors. Self-directed trading is
a completely different story, however. Although WellsTrade does supply quite a few market and
security analysis reports, these are not geared towards beginners.
TD Ameritrade, on the other hand, does have a large library of learning materials for new traders.
Small Accounts: WellsTrade’s $5,000 minimum deposit amount for Intuitive Investor is
rather steep. We endorse Firstrade, who has no minimum at all. For taxable self-directed trading, WellsTrade has no minimums or fees of any kind. For IRAs, Firstrade would be a better pick because it has no closeout fee.
Mutual Funds: We do like WellsTrade for mutual funds. On the company’s website, we found
8,151 funds open to new investors. Of this amount, 2,887 have neither load nor transaction fee.
Firstrade has over 10,000 free to trade mutual funds.
Broker’s mutual fund screener has many search criteria, and profiles include Morningstar
ratings and links to fund documents.
ETF and Stock Trading: Without a browser platform or desktop trading system, it’s hard to
defend WellsTrade. Webull, by contrast, has both types of platforms with fractional-share trading and good security research tools (plus advanced options trading).
WellsTrade Review Verdict
No, WellsTrade won’t top your current firm in most areas. It does do well in the realms of
mutual funds and portfolio management. But other areas, like customer service, software, cash
management, and margin rates, need significant improving.
WellsTrade Margin Rates
|
Debit Balance
|
Margin Interest Rates
|
|
under $24,999.99
|
13.75%
|
|
$25,000 - $49,999.99
|
13.25%
|
|
$50,000 – $99,999.99
|
12.75%
|
|
$100,000 - $249,999.99
|
12.25%
|
|
$250,000 - $499,999.99
|
11.75%
|
|
$500,000 - $999,999.99
|
11.25%
|
|
$1,000,000 - $4,999,999.99
|
10.75%
|
|
$5,000,000 - $9,999,999.99
|
10.25%
|
|
above $10,000,000
|
9.75%
|
WellsTrade IRA Fees
| Fee |
Amount |
| WellsTrade IRA setup fee |
$0 |
| WellsTrade annual IRA fee |
$30. Coverdell Education Savings Account annual fee: $20. Command Asset Program/Command Asset Program for IRAs: $125 |
| WellsTrade IRA termination fee |
$95 |
| WellsTrade account inactivity fee |
$0 |
| WellsTrade outbound full account transfer (ACAT) fee |
$95 |
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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