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Yearly Review of Stock Brokers

2013 Online Broker Review

Published by on February 19th, 2013 .

Fellow investors,

Another year has gone by, and the challenges facing us as investors are ever present. The start of 2012 was great, followed by a roller coaster year that included a dramatic Facebook (FB) IPO. In the end, while the market did wrap up the year in the green, it is clear to see that retail investors, on the whole, have become overwhelmed and slowed their participation in the stock market.

Daily average revenue trades, also known as DARTs, were down upwards of 20% or more for many online brokers in 2012. Serving as the primary revenue source, this slump strained margins; however, the industry pressed forth. Capital One completed its acquisition of ING Bank (including ShareBuilder) in February, TradeKing and Zecco tied the knot in May (forming TradeKing Group), and a slew of platform updates and new tools were released across the board.

Not all is rosy, though, as we found there was a distinct lack of innovation in 2012. Research is still the same outsourced data mining experience it has been for years, and many brokers now understand the importance of a web- based platform. Furthermore, every broker knows mobile is a frontier worth investing in, with many now offering easy- to- use, basic experiences. The most logical spaces for true innovation in 2013 are mobile trading and education; then again, other areas should not be ruled out.

Our goal here at StockBrokers.com is to push the industry forward. Less the brokers themselves, we are the toughest critics, not to mention advocates and cheerleaders for innovation alongside a quality client experience. As the brokerage industry adapts, invests capital in new offerings, and overall matures, investors have more tools available to them to succeed. It is this mission that has brought us to where we are today.

Our 2012 Broker Review was read more than 65,000 times in 2012, receiving over 100 social media shares and proving itself as the most respected broker review on the web. When StockBrokers.com launched in February of 2011, the brand was nothing more than 12 characters and a “.com”. Today, investors from more than 150 different countries visit StockBrokers.com each month, of which more than 16%+ type “stockbrokers.com” into their web browser and visit us directly.

While we find this humbling, we know we can push ourselves harder. For our 2013 Broker Review, we took our depth of research to a whole new level. We consulted with a private equity analyst to update our grading rubric, allowing for more data and separate rankings for each category. This year, participating brokers were each assessed on a staggering 283 different variables, requiring us to hire two additional part- time staff members and dedicating, once again, many hundreds of hours.

The fact of the matter is, we are honest, unbiased, and do not shun away from sharing the truth. While last year we had 24 brokers included and did not require participation on the part of the brokers, this year, to be included, brokers had to opt in. When it came down to making a decision, only 17 online brokers were brave enough to volunteer themselves and be assessed by our strict criteria.

I couldn’t be happier with this, because it means we are doing our job right. Take a look at the average broker website today, and you will quickly notice the littering of Barron’s awards and other print media accolades. Getting critiqued by professional journalists is one thing, but being reviewed by actual investors is another. Our battle cry is simple: for traders, by traders. No matter how you slice it, our review is the toughest around.

All in all, I am thrilled with the results of this year’s stock broker review. Between our new full length individual reviews and the research below, there are now more than 20,000 words of wisdom available for investors to digest. Furthermore, we have podcast interviews, dubbed the “2013 Broker Hot Seat,”, with CEOs and executives from every participating broker. Over five months of hard work has gone into what is, without a doubt, our best review yet. Thank you in advance for reading; we appreciate your support.

Here’s to us as investors and our success in 2013,

Blain Reinkensmeyer
Co-Founder & CEO
StockBrokers.com

2013 "Best in Class"

Our “Best in Class” groups highlight the top five brokers for nine different categories. Detailed analysis for each category is also included:

Industry Awards

Each year there are online brokers that stand out for going above and beyond. Our broker Industry Awards recognize these brokers for their hard work and dedication in the past year.

#1 Broker Innovation: tradeMONSTER

#1 International Trading: Interactive Brokers

#1 Banking Services: Merrill Edge

#1 Online Banking Services: ShareBuilder

#1 iPad App: TD Ameritrade

#1 Smartphone App: ETRADE

#1 Desktop Platform: thinkorswim by TD Ameritrade

#1 Web Based Platform: tradeMONSTER

#1 Platform (New Investors): tradeMONSTER

#1 Platform (Options Trading): tradeMONSTER

#1 Platform Technology: TradeStation

#1 Client Dashboard: ETRADE 360

#1 Overall Client Experience: Scottrade

#1 Retirement Services: Charles Schwab

#1 Trader Community: TradeKing

#1 Trade Ticket: optionsXpress

#1 New Tool: Scottrade FRIP

2013 Broker Hot Seat Interviews

For our 2013 Broker Review we interviewed executives from every participating broker. Known as the "Broker Hot Seat", these podcasts are roughly 10 - 15 minutes in length each and included four industry specific questions alongside a few fun questions.

Broker Representative Interview
Charles Schwab Kelli Keough SVP, Client Experience
Cobra Trading Chadd Hessing President & Founder
ETRADE John Matos SVP of Product Management
Fidelity Gregg Murphy SVP of Brokerage Products
Firstrade John Liu Chairman & CEO
Interactive Brokers Steve Sanders EVP Marketing & Product Development
Just2Trade Fuad Ahmed Founder & CEO
Lightspeed Steve Ehrlich CEO
MB Trading Ross Ditlove CEO & Co-Founder
OptionsHouse George Ruhana CEO
optionsXpress Joe Vietri CEO
Scottrade Derrick Brooks VP of Digital Solutions
ShareBuilder Dan Greenshields President
TD Ameritrade Steve Quirk SVP of Trading
TradeKing Don Montanaro CEO
tradeMONSTER Jim Swartwout President
TradeStation John Roberts COO

2013 Rankings

Self Directed Investing (Overall)

How we scored: Brokers were assessed in eight different categories with the following weightings: "Commissions & Fees" (15%), "Ease-of-Use" (15%), "Platforms & Tools" (15%), "Research" (15%), "Customer Service" (15%), "Offering of Investments" (15%), "Education" (5%), and "Mobile Trading" (5%). It is important to note that behind each category star rating is a numerical score, so while some brokers may have similar star ratings, total points earned for that category likely vary. With all of the category weighted scores calculated, a formula is then applied to determine the overall star rating.

  Commissions & Fees Customer Service Platform & Tools Research Ease of Use Offering
of Invest
ments
Education Mobile Trading Overall Rating
1. TD Ameritrade Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star
2. ETRADE Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star
3. Charles Schwab Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star
4. Scottrade Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star
5. Fidelity Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star
6. TradeKing Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star
7. optionsXpress Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star
8. tradeMONSTER Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star
9. OptionsHouse Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star
10. Interactive Brokers Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star
11. Firstrade Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star
12. ShareBuilder Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star
13. TradeStation Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star
14. MB Trading Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star
15. Just2Trade Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star
16. Lightspeed Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star
17. Cobra Trading Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star Star
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