According to Fidelity Investments first-ever Brokerage Value survey, investors say they place a large amount of importance on value. This survey asked 1,000 U.S. investors how they chose their brokerage firm. It also took a look at how educated the decision making process was for those investors. Price is listed as the number one reason that investors choose a brokerage firm. Still, there were many findings in this survey that show many investors have trouble knowing how to find value. From the survey, the top three criteria used to choose a broker were: low commissions and fees (44 percent), trusted brand/financial strength (41 percent), and wide selection of investments (37 percent).
How much did those investors know about the fees associated with their accounts? Not very much in most cases. A whopping 49 percent of investors admitted to not having any idea how much their brokerage firm charges for online trades. Not surprisingly, even more (58 percent) don’t know the fees associated with mutual fund transactions.
The survey also shows that 47 percent of investors have changed their primary brokerage firm at some point. After given details about price improvement, 76 percent said they would consider changing to a brokerage firm offering that improvement.
According to Ram Subramaniam, president of Fidelity’s retail brokerage platform, there are many investors who say they want value, but don’t know what they are searching for. He said, “The fact is a lot of brokerage customers don’t understand how much they’re paying for services, underscoring the importance of doing a little homework and asking the right questions when making decisions about where to invest to get the best value for their money.”
Knowledge truly is power, and StockBrokers.com does everything possible to help you find the best broker for you. Our 2015 Online Broker Review is a great place to start in your search.