Published by Blain Reinkensmeyer
On Sunday, May 1st, 2016
While ETRADE may not have the cheapest trades, the broker provides an easy-to-use website, a high quality mobile experience, and excellent research that will satisfy both casual and active investors.
Mobile apps still lead the industry; Revamped Complete View page and Retirement Center both serve as great examples of a high-quality customer experience; Investor Education Center content organization is fantastic.
ETRADE Pro platform requires 30 trades per quarter or $250,000 in assets for access; $9.99 trades pricier than most; ETRADE Pro lacks depth in charting and alerts capabilities.
February 16th, 2016: This Review has been updated to reflect the latest research and results from the 2016 Review.
Once known for its talking baby commercials, ETRADE has been working hard to evolve as a brand and speak to its current and target customers. The customers ETRADE targets are known as Type E*: investors who are confident, independent, yet willing to ask for help when they need it.
With this customer image in mind, ETRADE executes extremely well overall. ETRADE may not be the least expensive on the block, but the company continues to innovate with new tools and experiences for clients.
Commissions & Fees
While competitive with its other full-service broker competitors, such as TD Ameritrade, Fidelity, and Charles Schwab, ETRADE is not an ideal choice for investors seeking discounted commissions. In the broker space, though, most often what you pay for is what you get, and ETRADE's well-rounded offering offsets its higher rates.
Regular stock trades are $9.99, with options trades costing $9.99, plus $.75 per contract. All trades are flat rate commissions, meaning there are no gimmicks to watch out for, and hyperactive traders can get their rate as low as $6.99 if they make 1,500-plus trades per quarter.
ETRADE does stand out from its competitors with its mutual fund commissions, which run at $19.99 per trade. Charles Schwab, Fidelity, and TD Ameritrade charge $76.00, $49.95, and $49.99, respectively. As far as total selection is concerned, the broker offers just under 8,000 to choose from.
Lastly, I found that ETRADE has a reputable offering of commission-free ETFs, an offering that has become increasingly popular industry wide in the past few years. While the broker does not quite match Charles Schwab's 200-plus commission-free ETFs offering, there are still 118, which is second highest in the industry.
Ease of Use
The ETRADE website is a breeze to use thanks to a new navigation experience launched in late 2014 and innovative tools such as ETRADE 360, the broker's fully customizable drag-and-drop homepage. The new navigation is clearly driven by understanding what customers use most. Hover over Accounts and the sub-menu options are “My Accounts,” “Move Money,” “My Profile,” “Tax & Account Records,” and “Banking.”
To help new customers get started, ETRADE revealed a new Welcome Center in 2015 and redesigned its accounts overview page, Complete View. The new Complete View is a big upgrade over its predecessor, providing new and current customers a very clean overview of their individual accounts. Portfolio holdings, watch lists, and news are all accessible under a new tabbed snapshot module. I also really appreciated the updated account alerts window. Given time, I can see Complete View unseating the 360 dashboard as the preferred default post-login page.
The experience doesn’t stop at just the ETRADE website, either. In October 2014, the broker launched a brand-new app for the Google Chrome browser, allowing for quick real-time quotes, portfolio monitoring, and trading on the go. Our testing found the app to be a seamless extension of the website experience and a very smooth experience overall. That said, I found ourselves ignoring the browser app in favor of accessing the website instead; habits are hard to break.
One final note: In 2015, ETRADE decided to remove its site-wide footer quote bar, something I grew to love over the years. Lack of use among customers was cited as the primary reason for removal; however, the bar wasn’t enabled by default, and customers had to manually enable it. Now, instead of being able to quick view quotes and remain on any page, customers have to enter the symbol in the upper right corner, which transfers them to a formal quote page.
In this year’s 2016 Broker Review, we found ETRADE's customer service improved over last year; however, it was just slightly above the industry average. The company’s customer service is very good, but it’s not award winning. The highlight for ETRADE in our 2016 Review was its phone support, which finished 4th overall. Email support finished 9th, and live chat 8th. In our 2014 Broker Review, ETRADE's email support was rated #1.
ETRADE finished 5th overall when all customer service testing was taken into consideration, good enough for a Best in Class award, which is certainly no easy feat. In 2014, ETRADE updated its website to make its customer support phone number visible on every page. In 2015, the broker made enhancements to its new client onboarding and ETRADE Pro platform onboarding. Consistent efforts have made their mark, and we hope ETRADE will continue to climb the ranks in 2016. To do so, they will need to improve response times for both phone and email, an area in which the top brokers excel. See: Best Brokers for Customer Service.
Performing research on ETRADE is simple and user-friendly. After pulling up a quote for Apple (AAPL), clients see a quick overview of key statistics alongside a mini chart of the current day's action, alerts setup, buy and sell buttons, headlines, price analysis from Trefis Research, a company overview description, and a box highlighting some recent analysts’ research reports.
ETRADE's third-party research report providers include Thomson Reuters, Standard & Poor's, MarketEdge, and SmartConsensus. Access to the four providers is strong and something not found with discount brokers; however, compared to its closest competitors, ETRADE falls short as Charles Schwab, Fidelity, and TD Ameritrade all provide access to at least six.
For investors who value analyst recommendations, ETRADE offers consensus ratings from multiple third parties and in 2015 added breakdowns from individual analysts. Powered by TipRanks, individual analysts are ranked, profiled, and their consolidated average price target is plotted with high and low estimates included.
While the plotted average price targets were clean and overall useful, I found the Individual Analyst breakdowns below them to be a distraction. For example, Apple had 37 analyst recommendations. Of these analysts, 23 (65%) had at least a four star TipRanks ranking (five stars is the highest) which left me wondering, “Whose opinion should I trust most?” There is certainly potential; however, the ratings need some tuning.
Reports and analyst analysis aside, I particularly enjoyed the charting functionality, as I could pop out the chart box into its own window and then enlarge it to take full advantage of my 24-inch monitor. Adjusting settings and adding studies alongside company event data such as splits, dividends, earnings, and insider trades was helpful. The standout feature here was the ability to display post-hours trading activity, which is great to use during the earnings season.
Platforms & Tools
For clients looking to simply track their favorite stocks and holdings, the ETRADE MarketCaster is the broker's real-time streaming quotes tool, which pops up as a new window when launched. MarketCaster is simple, easy-to-use, easily customizable, and I found it to be a nice tool to leave open throughout the day to keep an eye on positions or a custom watch list.
For feature-hungry clients, there is ETRADE Pro (desktop-based). Access to ETRADE Pro requires Pro Elite status, which means making at least 30 stock or options trades per quarter or having a portfolio balance of $250,000. ETRADE Pro can be accessed for $99 per month, otherwise. In comparison, TD Ameritrade and Charles Schwab both give full access to their flagship platforms with no strings attached, while Fidelity and Scottrade also have requirements.
On the surface, ETRADE Pro has all the bells and whistles an active trader could want, with snap grid functionality for quick and easy customizing. Pro supports some 20-plus tools, including streaming live CNBC TV, a real-time strategy scanner, several options tools, advanced charting, real-time sales, and level II quotes, among others. To help new users become acquainted, in 2015 ETRADE launched a complete new user orientation experience, which includes a tour, help videos, and suggested layouts.
While ETRADE Pro is impressive, a deeper dive into its features reveals how the platform falls behind its competitors. Compared with industry leaders, ETRADE Pro lacks depth in two key areas: charting and alerts functionality. With charting, ETRADE Pro’s lack of tools and technical studies is hard to overlook. While I counted 10 new studies added in 2015, ETRADE Pro still only offers 47 in total, a far cry from the 157, 166, and 337 offered by TradeStation, Fidelity, and TD Ameritrade, respectively. For alerts, only basic alerts are supported and they can’t be shown on charts. See: Best Brokers for Platforms & Tools.
On the positive side, I were very happy to see ETRADE Pro upgrade its options tools in 2015, updating the option graphs, expanding option probability analysis, and streamlining order entry. Also launched into private beta in 2015 was a brand new Margin Analyzer tool. I found the functionality provided to be fantastic, giving clients exactly what they need to monitor, manage, and plan for margin changes in their portfolios. The tool exited private beta in late January, 2016, and has begun rolling out to all clients.
One other note about Pro Elite status: Alongside free access to ETRADE Pro, Pro Elite also gains access to the Elite customer service team for service and trading. Considering the quality of regular customer service is already strong, I found Elite status to be of little use, less so on the rare trading day when the market is in disarray and call volumes are excessive.
As the first broker to really push mobile, ETRADE continues its dominance, finishing first overall again in our rankings. In 2015, ETRADE launched its Apple Watch app and remained the only brokerage to allow clients to compare their portfolio performance against the overall market averages (a nice touch). ETRADE had a handful of other features few other brokers offer: CNBC TV, level II quotes, customized stock screening, and third-party ratings, among others.
The only area in which ETRADE really falls behind is charting, where only two indicators are supported. While only having a handful of technical indicators/studies available to add to a chart is fairly standard, I expected more from ETRADE, considering its leadership in the industry.
Charting aside, with 48 variables being assessed for mobile trading, ETRADE earned 95% of total possible points. The broker is No. 1 in my book because its apps are easy to use, dependable, and feature rich.
Alongside trading, ETRADE also offers basic banking services, including checking accounts with no ATM fees and debit cards. The broker also provides 30 local branch offices. See: Best Brokers for Banking Services.
ETRADE as a brand has had its fair share of ups and downs over the years. The broker rose to be a leader in the industry in the early 2000s, then the stock price took a beating throughout 2007 and 2008 as the broker's mortgage portfolio became toxic. Despite these struggles during the worst financial crisis in US history since the great depression, ETRADE’s trading experience has stood strong.
The broker pressed forth and became the undisputed leader in mobile trading, which was then unchartered territory. Most recently, the move away from the iconic baby commercials has ETRADE focusing on its core clients, Type E*. The broker remains #1 in its mobile offering, continues to innovate with new offerings such as its revamped retirement center, and, all in all, provides a wonderfully well- rounded offering for its clients.
Whether you’re an active trader, a new investor, or just someone looking to manage a retirement portfolio, ETRADE is a dependable, full-service broker that impresses all investor types and gives its competitors a run for their money.
Blain has been involved in the markets for over 13 years, heading StockBrokers.com equity broker research and reviews. His personal blog, StockTrader.com, provides to-the-point daily market recaps to over 17,000 subscribers.
E*TRADE has a fairly straight forward commissions structure. Note that ETRADE's advanced trader platform, Power ETRADE Pro, is free if atleast 30 trades are made each quarter or if there is $250,000 in total assets. Otherwise the platform can be used for $99 per month.
Stock Trades - All trades are a flat-rate $9.99 if making up to 149 trades per quarter, $7.99 (150 - 1499 trades per quarter), and $6.99 (1500+ trades per quarter). For broker-assisted trades, add $45 to the total order. When trading during pre and post market hours, an ECN fee of $.005 per share is added to the regular commission rate.
ETRADE does not charge any additional fees for placing penny stock trades or buying OTCBB / Pink Sheet stocks. For any stock under $1 per share, only limit orders (no market orders) may be used to place trades.
Options Trades - $9.99 + $.75 per contract.
Mutual Funds - All mutual funds cost $19.99 per trade. Additional fees may apply depending on the fund.
International Trading - ETRADE formally retired its global trading offering in 2015.
All pricing data was obtained from a published web site as of 2/16/2016 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 bottom 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.