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Broker Reviews

Charles Schwab

Published by
On Tuesday, September 23rd, 2014 .

Overview

For those seeking a quality customer experience, professional planning for the future, and access to fantastic research, Charles Schwab will not disappoint.

Dislikes

Despite optionsXpress acquisition, separate accounts must be maintained for both brokers; Transaction fee funds cost $76 per trade (per buy, $0 to sell); only max two-legged options supported via the website.

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Charles Schwab Review

When I login to Schwab.com, immediately I am greeted with my latest account notices alongside an overview of my portfolios. While the client dashboard is no ETRADE 360, it serves its purpose well, and the rest of the site is a breeze to navigate.

Offering 24/7 support, Charles Schwab delivers a consistent and often memorable experience. I will never forget originally opening my Schwab account, as within an hour of completing the application, a Schwab representative called me to personally welcome me to the site and answer any initial questions I had. During our testing for the2012 Broker Review, Schwab blew me away when a courteous and knowledgeable representative quickly picked up my call at 8 p.m. on a Sunday. The rep had no trouble answering my questions, and these experiences time after time have left an impression I will not forget anytime soon.

When it comes to service, I expect that from Schwab. Being a full-service brokerage, I want to feel confident trusting them with my nest egg and knowing there is always someone ready to assist me or offer guidance.CompetitorsTD Ameritrade, Scottrade, and Fidelity give Schwab a run for its money, as they, too, are very consistent. If there is one con I found with Schwab's service, it's that they do not take advantage of their local branch offices.Scottradedoes this very well by being the only broker that routes all support calls during market hours straight to its local branch offices. Where Schwab makes me know that guidance is one call away, Scottrade reminds me that guidance is only a short drive away for face-to-face interaction.

Commissions & Fees

Whether trading stocks or options, Charles Schwab is right in line with its closest competitors. Its $8.95 flat-rate stock trades are less expensive than both ETRADE and TD Ameritrade ($9.99), while slightly more expensive that Fidelity ($7.95) and Scottrade ($7). The same goes for option trades, which run $8.95, plus $.75 per contract.

Investors trading ETFs also will enjoy Charles Schwab as the broker leader in its offering of commission-free ETFs with 121 in total. Mutual funds are a low point, as transaction fee funds come with a $76 per trade charge (per buy, $0 to sell), the highest in the industry.

Charles SchwabETRADEFidelity TD AmeritradeScottrade
Stock Trade Fee (flat)$8.95$9.99$7.95$9.99$7.00
Options Base Fee$8.95$9.99$7.95$9.99$7.00
Options Per Contract Fee$0.75$0.75$0.75$0.75$1.25
Mutual Fund Trade Fee$76.00$19.99$49.95$49.99$17.00
Commission Free ETFs1219276101
Commissions & Fees
Overall

Research

Charles Schwab provides the highest quality of research compared to any of the brokers I've tested here at StockBrokers.com. Accessing a wealth of independent research alongside Schwab's own in-house research is simple. When I pull up a quote for Apple (AAPL), the summary page has a similar feel to competitors TD Ameritrade, ETRADE, and Fidelity; however, Schwab is the only broker to offer its own in-house Equity Rating. And while this does separate Schwab, one thing I did miss was one consistent point of view, something thatFidelitydoes very well with its Equity Summary Score via StarMine, alongsideTD Ameritrade'suse of ResearchTeam.

With so much research available for traders today, I appreciate the fact that Schwab puts their own viewpoint front and center whenever possible. This is where Schwab really separates itself, as none of its competitors offer such unique depth. What's even more impressive is the staff of experts Schwab has onboard providing market commentary and analysis (26 in total as I write this review). To be able to see experts like Liz Ann Sonders, Schwab's Chief Investment Strategist, interviewed on YahooFinance's"The Daily Ticker" and thereafter be able to read her latest editorial on the Schwab site is pretty awesome.

Schwab equity ratings

The standard charting functionality is basic yet well-built, as little details are not overlooked. Whichever settings you apply to one chart are automatically saved as the default, so every time a fresh chart is loaded, you do not have to spend time to re-configure it to your liking. Schwab offers 34 different indicators that can be added more than enough for the average investor. I also like having the ability to add notes to any chart, althoughadmittedly,they are hard to find once included.

Platforms & Tools

Charles Schwab currently offers clients access to three different platforms: StreetSmart.com (Web-based), StreetSmart Edge (desktop-based), and StreetSmart Pro (desktop-based). StreetSmart Pro is a product of Schwab's previous CyberTrader acquisition. The platform is very outdated and eventually will be replaced by StreetSmart Edge; as a result, I did not include it in my review. Also note that Schwab acquired OptionsXpress in 2011, but as of this review, has not added support for the Xtend platform; as a result, it too is not included in this review. For a breakdown of Xtend, please read myOptionsXpress Review.

StreetSmart.com is a browser-based platform recommended for clients looking for more out-of-the-box functionality and less advanced features. Real-time streaming watch lists, level II quotes, alerts, conditional orders, and slightly more advanced charting functionality makes up the bulk of this platform's offering. What I enjoyed most was simply its ease-of-use. Quick links are found throughout the pages to hop from a quote to a chart, and from there to quickly place a trade, for example.

Schwab streetsmart charting

Charles Schwab's desktop based platform, StreetSmart Edge, is a very robust platform that requires a slight learning curve, as all active trader platforms do, to become acquainted with it. Everything is fully customizable, from two different platform color schemes to custom layouts, which can be built on the fly for quick access to different screens.While all tools or products opened can be fit together in snap grid fashion, the functionality is not quite as intuitive as ETRADE's active trader platform,ETRADE Pro.

Some of the features that stood out during my testing of StreetSmart Edge included the customizable watch lists, allowing a large selection of different columns to be displayed. The "Launch Tools" button allows for quick access to the platform's products, and I liked the pop-up notifications that let me know whenever any of my orders triggered, were filled successfully, etc. For positions you currently hold, markers appear on the charts to visually show you when and what price you purchased the stock,a feature that most of Schwab's competitors do not have.

Options traders will love the easy order entry, thanks to a customizable version of optionXpresss infamous all-in-one trade ticket. Analyzing theoretical positions is also a breeze using the Trade & Probability Calculator, another ported tool from optionsXpress.

Lastly, advanced charting is much cleaner and more robust on the platform compared to StreetSmart.com and almost feels like Adobe Photoshop, as studies and drawings can be quickly added, hidden, or removed with a simple click. Traders who require 8, 12, 16, or 20-plus charts running at once, though, will find StreetSmart Edge less flexible than, say,thinkorswim by TD Ameritrade. Overall, the platform is easy to love.

Schwab streetsmart edge charting

Final Thoughts

Charles Schwab is a well-respected broker with a very balanced offering. Customer service is top-notch and clients have access to a plethora of quality research, not to mention the largest selection of commission-free ETFs in the industry.

The brokers platforms and tools, especially StreetSmart Edge, continue to improve, thanks to the ongoing integration of optionsXpress. Beyond independent investing, clients interested in life planning, personalized strategies for their portfolios, and making the most of retirement also will find Schwab to be a great fit.


Blain Reinkensmeyer

Reviewed by

Blain has been involved in the markets for over 12 years, heading StockBrokers.com equity broker research and reviews. His personal blog, StockTradingToGo.com, provides to-the-point daily market recaps to over 17,000 subscribers.

Commission Notes

With Schwab as your online broker, what you see is what you get. Charles Schwab applies a simplified flat-fee based commissions structure with few catches or fine print notes. There are no limits on total trade size or price, and the site simply let's investors know that if they are trading positions of over 10,000 shares or $500,000 that they may be eligible for a special handling and/or pricing.

Stock Trades - All online trades are a flat $8.95. Our research found no additional fees or charges for trading stocks under $1 or trading during pre and post market hours

If using the Schwab automated phone system to place a trade, a $5 fee will be added to the order. There is a $25 additional fee for broker assisted trades.

Options Trades - Options trades are $8.95 + $0.75 per contract. For orders including a equity leg plus an options leg, there is no base commission for the option leg. Thus, the $8.95 base rate is only charged once.

Mutual Funds - All transaction fee mutual funds cost $76.00 per trade. Note, unlike most brokers, Charles Schwab alongside Fidelity only charge for the original purchase. There is no additional charge for selling.

For investors seeking No Transaction Fee (NTF) funds, Schwab offers clients access to its OneSource Funds. OneSource funds are NTF, No Load (NL) funds selected based on a variety of factors, the biggest being past performance.

Trade Commissions Breakdown

$8.95 Stock Trade Fee (flat)*
N/A Stock Trade Fee (per share)*
$8.95 Options Base Fee*
$0.75 Options Per Contract Fee*
$8.95 Options Exercise Fee
$8.95 Options Assignment Fee
$76.00 Mutual Fund Trade Fee
$25.00 Broker Assisted Trades Fee
$1,000.00 Minimum Deposit

Margin Rates

8.50% Under $24,999.99
8.00% $25,000.00 to 49,999.99
7.00% $50,000.00 to $99,999.99
6.88% $100,000.00 to $249,999.99
6.75% $250,000.00 to $499,999.99
6.75% $500,000.00 to $999,999.99
6.25% Above $1,000,000.00

Miscellaneous Fees

$0.00 Bond Trade Fee
$0.00 Treasury Trade Fee
$0.00 CD Trade Fee
$5.00 IVR Trade Fee
$0.00 IRA Annual Fee
$50.00 IRA Closure FEe
$0.00 Forced Margin Sellout Fee
$25.00 Returned ACH Fee
$25.00 Returned Wire Fee
$500.00 Stock Certificate Processing Fee
$0.00 Stock Certificate Delivery Fee
$0.00 Paper Statement Fee
$0.00 Paper Confirmation Fee
$25.00 Domestic Wire Fee
$25.00 International Wire Fee

Example Trades

Broker Ratings

Overall
Commissions & Fees
Ease of Use
Research
Platforms & Tools
Customer Service
Mobile Trading
Offering of Investments
Education

Broker Awards

2014

Charles Schwab finished #5 Overall with 4.5 stars; Best in Class for Platforms & Tools, Research, and Education; Was awarded #1 for Retirement Services. Read the 2014 Online Broker Review.

2013

Charles Schwab finished #3 Overall with 4 stars, was awarded Best Banking Services, and #1 for Research. Read the 2013 Broker Review.

Offering of Investments

CDs
Self-clearing Clearing Firm
121 Commission Free ETFs
Yes Corporate Bonds
Yes Direct Market Routing - Stocks
Yes DRIPs
7000 # of Easy to Borrow Stocks
Forex Trading
Futures Trading
Yes No Fee IRAs
Mini Options
Yes Municpal Bonds
Yes Mutual Funds
7445 Mutual Funds (Load)
11530 Mutual Funds (No Load)
6856 Mutual Funds (NTF)
16478 Mutual Funds (Total)
Yes No Inactivity Fees
No Minimum Deposit
Yes Options Trading
Yes Order Type - After Hours
Order Type - Algo
Yes Order Type - Broker Assisted
Yes OTCBB / Pink Sheets
300 Retail Locations
Yes Stock Trading
US Treasury Bonds
Yes Weekly Options

Customer Service

Yes Phone Support
Yes Email Support
Live Chat (prospect clients)
Yes Live Chat (current clients)
Yes 24/7 Support

Platforms & Tools

Yes Desktop Platform
Yes Mac Platform
Yes Web Platform
StreetSmart Edge Active Trading Platform
Auto Investing
Ladder Trading
Yes Level 2 Quotes - Stocks
Yes Streaming Time & Sales
Yes Streaming CNBC TV
Yes Trade Hot Keys
Virtual Trading
Yes Options Chains - Basic View
Yes Options Chains - Strategy View
Yes Options Analysis - P&L Charts

Research

Yes ETFs Research
Yes Mutual Funds Research
Yes Pink Sheets / OTCBB Research
Yes Fixed Income Research
Yes Global Market Overview
Yes Equity Research - News
Equity Research - Chart
Equity Research - Option Chains
Yes Equity Research - Balance Sheet
Yes Equity Research - Cash Flows
Equity Research - SEC Filings
Equity Research - Insider Analysis
7 Equity Research - 3rd Party Reports
Yes ETF Research - Top 10 Holdings
Yes ETF Research - 3rd Party Ratings
Yes ETF Research - 3rd Party Reports
Yes Mutual Fund Research - Prospectus
Yes Mutual Fund Research - 3rd Party Reports
Yes Mutual Fund Research - Fees Breakdown
Yes Mutual Fund Research - Performance Analysis
Yes Mutual Fund Research - Performance Chart
Yes Mutual Fund Research - Top 10 Holdings
Yes Mutual Fund Research - 3rd Party Ratings
Yes Screener - Stocks
Yes Screener - ETFs
Yes Screener - Mutual Funds
Yes Screener - Options
Yes Screener - Bonds

Education

Yes Has Education - Stocks
Yes Has Education - ETFs
Yes Has Education - Options
Has Education - Mutual Funds
Has Education - Bonds
Yes Has Education - Retirement
Yes Investor Dictionary
Yes Client Webinars
Yes Live Seminars
Yes Retirement Calculator
Yes Community Forums

Mobile Trading

Yes iPhone App
Yes iPad App
Yes Android App
Yes Mobile Site
Yes Company Data
Yes Company News
Yes Watch List Syncing
Yes Options Chains Viewable
Yes Market Movers (Top Gainers)
Barcode Lookup
Yes Charting - Multiple Time Frames
Yes Charting - Can Turn Horizontally
Charting - Portfolio Perf vs Indices
Yes Charting - Stock Comparisons
Yes Trading - Stocks
Yes Trading - Simple Options
Yes Withdrawal Balance Avail

Banking

Yes Checking Accounts
Yes Savings Accounts
Yes Debit Cards
Credit Cards
Yes Mortgage Loans
Yes Mobile Check Deposit
Yes ATM Fee Reimbursement
Yes No Fee Banking

Active Trading

Internalizes Trades
Yes Receives Payment for Order Flow
Client Liquidity Rebates

Best in Class

Yes Best in Class - Offering of Investments
Best in Class - Commissions & Fees
Yes Best in Class - Platforms & Tools
Yes Best in Class - Research
Best in Class - Customer Service
Best in Class - Ease of Use
Yes Best in Class - Investor Education
Best in Class - Mobile Trading
Best in Class - Active Trading
Best in Class - Options Trading
Best in Class - New Investors

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All pricing data was obtained from a published web site as of 04/07/2014 and is believed to be accurate, but is not guaranteed. The StockBrokers.com staff is constantly working with its online broker representatives to obtain the latest pricing data. If you believe any data listed above is inaccurate, please contact us using the link at the top of this page. * For stock trade rates, advertised pricing is for a standard order size of 500 shares of stock priced at $30 per share. For options orders, an options regulatory fee per contract may apply.

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