Published by Blain Reinkensmeyer
On Tuesday, May 12th, 2015 .
While Firstrade lacks a feature-rich platform, the broker maintains a clean website and offers its clients the basics to maintain a long-term portfolio.
Easy-to-use website; straightforward client-side navigation; ETFs and Mutual Funds research.
Website lacks quality trading tools; X-Stream tool design extremely outdated with limited functionality.
With its $6.95 flat trades and a website that provides a little bit of everything for everyone, Firstrade puts up a respectable fight with the leaders in the industry. However, we must ask whether that makes them a legitimate choice to park an investment portfolio. Or is Firstrade a broker not worth the trouble?
This review will break down the facts and reveal the answer.
Commissions & Fees
When it comes to trades, Firstrade tends to keep things simple, offering investors flat-fee stock trades for $6.95 each. Options trades run at $6.95, plus $.75 per contract. Stocks less than $1 also come with higher fees.
On the equities side, Firstrade competes most closely with Scottrade, whose trades run at $7 per trade or $.05 more per trade. And for options trading, it is no coincidence that TD Ameritrade, ETRADE, Charles Schwab, and Fidelity all charge $.75 per contract, plus their normal base fee.
Firstrade has the advantage with mutual funds, charging less than its big brother competitors. However, matched up against discount brokers such as TradeKing and OptionsHouse, Firstrade is right in line. Lastly, Firstrade does offer 10 commission-free ETFs, which is a plus. Unfortunately though, this is not a lot compared to Charles Schwab, ETRADE, or TD Ameritrade, which all offer more than 100.
As far as research goes, Firstrade significantly improved its experience for clients after it migrated to Morningstar as its primary provider in 2013. Morningstar is the most popular research provider in the industry, and for good reason – its quality data and unique variables are top notch.
Under Morningstar, Firstrade now offers its clients thorough research for stocks, ETFs, and mutual funds. Having said that, however, Firstrade still has room for improvement.
Firstrade offers only one third-party research report for stocks, and none for ETFs or mutual funds. Scottrade, which charges just $.05 more per trade, provides its clients with three third-party research reports for stocks, one for ETFs, and one for mutual funds. Lastly, pay just $1 more per trade and investors can have access to the 13 third-party research reports offered by Fidelity for equities alone.
Ease of Use
One area in which Firstrade shines is in ease of use.
Firstrade's website is not only well designed, but also easy to navigate. It just works. The primary navigation menu is well labeled and takes advantage of primary links with sub-navigation below, a proven format that yields happy clients. The broker also boasts a site-wide quote bar with real-time streaming quotes and a quick trade ticket built in. Top that off with a well laid out research area, and it is a recipe for success.
Even the client dashboard is well constructed, clean, and customizable. Customizable dashboards are becoming increasingly popular with clients, offering them a clear view of everything important to them upon login. While Firstrade's client dashboard is no ETRADE 360 (our personal favorite on the web), the broker has done a good job.
Logging in now is even a straightforward and secure process. Our one gripe with Firstrade’s website used to be the login process, which took a turn for the worrisome in 2013 when the broker released its new state-of-the-art “Security Ring” PIN login. The patented method for entering your account pin was tedious, not intuitive, and more or less annoying. Heeding our advice, Firstrade updated its login PIN to match a standard keypad found at your everyday ATM.
Firstrade does not offer a desktop-based platform. Instead, its website and Java-based X-Stream Watchlist tool make up its platform. This leaves Firstrade at a massive disadvantage when trying to attract even remotely active traders, as there is a distinct lack of depth overall.
Charting, for example, is okay for a website, but without a platform, the lack of customizations becomes very noticeable. While 31 technical indicators are available (an improvement from just 17 in our 2014 Broker Review), unfortunately only the most basic customizations can be made to any of them. Also not available: virtual trading, chart notes, trading off the chart, viewing greeks in option chains, options analysis, or sound alerts. The list is long.
For clients who can't live without level II quotes or more advanced charting, Firstrade does offer an X-Stream Level II service for $19.95 per month. However, we advise saving the money.
On the mobile trading front, Firstrade offers a basic iPhone and Android smartphone app (launched in 2014), but not an iPad or Android tablet app as of yet.
While Firstrade offers a well-organized website and quality research, the broker lacks the depth to compete with the big full-service brokers. The price paid per trade simply does not match the value delivered by its key competitors.
With that said, for clients who are looking for an all-round easy-to-use broker with a very “homey” type feeling, Firstrade could be a great fit.
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.
Firstrade is another broker that offers flat fee commissions for both stocks and options. Alongside regular ETFs, the broker also offers 10 commission free ETFs. NASDAQ level II streaming quotes can be purchase for $19.95 per month.
Stock Trades - $6.95 flat fee per trade. For stocks under $1.00, the broker charges the lesser of: A. $6.95 + $0.005 x numbers of shares and B. Share price x numbers of shares x 5%.
Options Trades - $6.95 + $.75 per contract. Exercise & assignments are $14.95.
Mutual Funds - All no-load mutual funds cost $9.95 per trade. There is no commission for load-funds and NTF (no transaction fee) funds. Additional fees may apply depending on the fund.
Inactivity Fee - Firstrade charges a yearly inactivity fee of $19.95 when no trades are made during the previous 24 months AND the total account equity is less than $2,000. The fee can be waived by placing a trade or by maintaining an account balance above $2,000.
All pricing data was obtained from a published web site as of 5/01/2015 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.