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Scottrade

Published by
On Thursday, July 24th, 2014 .

Overview

Scottrade offers self-direct investors the tools they need to succeed, and for investors seeking guidance, Scottrades massive branch office network with reliable and personable relationships is an easy win.

Dislikes

ScottradeELITE requires $25,000 minimum; weak in-house options capabilities - instead offers OptionsFirst platform powered by OptionsHouse for advanced options trading.

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Scottrade Review

To cut to the chase: Scottrade lives up to its commercials.Scottrade defines what a broker-client relationship should be, with everything from opening an account to placing a trade or receiving professional guidance; it is a straightforward and enjoyable experience.

When I opened a new account to conduct my Scottrade review, I knew Scottrade had tough competition and was curious to see how well the broker would perform. The application was a breeze as I filled in information and took advantage of the live chat assistance. Within several hours of completion, a Scottrade rep from my local branch office called me, welcoming me to the broker, letting me know where they were located, and seeing if I had any questions.

Immediately, I felt like I was in good hands and couldn't help but think that Scottrade was going to be my new best friend.

Customer Service

Scottrade, which won our title for Best Overall Client Experience in our2012, 2013, and 2014 Review of Online Brokers, offers the most personalized customer service out of any of the full-service brokers I've tested. And considering the competition, this is no small feat. I found that Scottrade is the only online broker that completely leans on their local branch office network. Calling the support phone number on the Scottrade website during market hours prompts you for your zip code, then redirects you automatically to your local branch office.

Within a few rings, I was speaking with a rep from my local branch office. Not only did they know the Scottrade website like the back of their hands, but they had no trouble answering my questions regarding my new account and website. Scottrade's network has more than 500 local branch offices within the United States, and all operate during standard market hours:8:30 a.m. to 5 p.m. Monday through Friday.

The only downside I found with Scottrade's phone support is that it is not 24/7, unlike TD Ameritrade, ETRADE, Fidelity, and Charles Schwab, who all offer phone support any day, any time.

Commissions & Fees

Scottrade, when compared to other full service brokerages, is less expensive on the whole. Regular stock trades cost $7 compared to its closest pricing competitor, Fidelity, which charges $7.95 per trade. Charles Schwab is next closest with its $8.95 trades. All trades operate under a flat-fee structure, meaning there are no gimmicks or trickery. Pricing is straightforward and simple unless trading stocks less than $1 per share, in which the cost is $7, plus .5% of the trade value.

Options trades will set you back $7, plus $1.25, which is more pricey than its competitors if trading more than a handful of contracts at a time. TD Ameritrade, ETRADE, Fidelity, and Schwab all have higher base commission charges but only charge $.75 per contract instead of Scottrade's $1.25.

Lastly, Scottrade offers a massive selection of mutual funds to choose from, more than 14,500 funds in total, so you will not have any trouble finding something that suits your portfolio mix. Mutual fund trades cost only $17 each, the lowestamongits competitors. For those who prefer ETFs over mutual funds, Scottrade maydisappointas it does not have a selection of commission-free ETFs. If commission-free ETFs are your thing, then consider TD Ameritrade or Charles Schwab,as the broker offers more than 100 of them.

ScottradeTD AmeritradeETRADEFidelity Charles Schwab
Stock Trade Fee (flat)$7.00$9.99$9.99$7.95$8.95
Options Base Fee$7.00$9.99$9.99$7.95$8.95
Options Per Contract Fee$1.25$0.75$0.75$0.75$0.75
Mutual Fund Trade Fee$17.00$49.99$19.99$49.95$76.00
Broker Assisted Trades Fee$32.00$44.99$25.00$32.95$25.00
Commissions & Fees

Research

Scottrade's research offering is fairly thorough, covering the major bases well, including fundamental data on insiders, earnings, financials, and even SEC filings from several third-party research providers. Compared to its competitors, third-party research is one area where Scottrade falls behind. Pulling up a quote on Apple (AAPL) offered me reports from three different third-party providers: Standard & Poor's, Thomson Reuters, and Second Opinion. While this will more than satisfy the majority of investors, picky clients may still be left craving more.

Navigation through the research area, like the rest of the Scottrade website, was clean and straight-forward. Not only does Scottrade have a quick quote box on the top header, but they also have one on the left sidebar and footer bar. You can even place trades from any page, or website for that matter, by popping out the trade ticket bar in the footer - another nice touch. Focusing back on the research section, whether pulling up a quote or looking at a stock chart then reading an analyst report, I had no problems finding my way around.

One feature I really enjoyed, which is exclusive to Scottrade clients, was the Scottrade SmartText functionality. SmartText analysis is available for charts, sectors and industries, and earnings. With charts, for example, Scottrade SmartText will quickly analyze any indicator you add and give you an easy-to-understand explanation of what that indicator implies for the stock you are researching. For example, SmartText gave me this breakdown for Google's 13 day moving average, "On Tuesday, GOOG closed below its 13-day moving average. This is generally considered to be an indication of a bearish trend."

Scottrade's research is also thorough for mutual funds. With research provided by Morningstar, my personal provider choice for mutual funds research, Scottrade does notdisappoint. Immediately after pulling up a quote for Pimco's Total Return Fund PTTDX, a chart appeared displaying the fund's performance in the last decade compared to intermediate-term bonds and the S&P 500. I then read a synopsis of the fund's strategy, took a look at the Morningstar category ratings, and analyzed the fund's expenses to help me make a decision on whether to buy or not.

scottrade research summary

Platforms & Tools

Scottrade offers several different platforms: Scottrader Streaming Quotes, Scottrade ELITE, and Scottrade Options First (white-labeled version ofOptionsHouse2.0 platform). Scottrade ELITE requires clients to have atleast $25,000 in their account before gaining access.

Scottrader Streaming Quotes is a Java-based application that neitherruns in a browser nor operates as a full desktop download.Instead, it loads as a Java app through the web. With easy buttons to open new windows and three customizable layouts, I found the application functionality to be easy to setup and use. Each watch list is drag-and-drop friendly and can have up to 40 securities.

scottrade streaming quotes

The one major gripe with the Scottrader Streaming Quotes application is that there is no snap window functionality, so aligning any open windows (the trade ticket, charts, top gainers, time and sales box, etc.) to fit into a grid is a bit tedious. My only other criticism would be that the quote screen window does not display the market index returns in large numbers at the top. Instead they are small items at the bottom and do not include a percent return for the day. Pickiness aside, Scottrade Streaming Quotes gets the job done.

Scottrade's advanced platform, Scottrade ELITE, is a desktop- based platform designed for active traders seeking detailed functionality beyond what Scottrader Streaming Quotes has to offer. Like Streaming Quotes, the first thing I noticed was the lack of snap window functionality and the unfavorable positioning of the latest market indices performance. While the platform does offer customizable layouts and several nice tools like Trade-Ideas real-time scanning and Velocity & Forces, overall, I was unimpressed.

Scottrade ELITE is the weakest active trader platform among its competitors. With that said, Scottrade currently has the next generation of its flagship platform in beta testing, which should be released sometime in 2014.

Other Notes

In the summer of 2013, Scottrade released its second generation iPhone and Android app alongside its first generation iPad app. With a much cleaner interface and cloud syncing watchlists, the apps are easy-to-use and, overall, very well built. These new apps propelled Scottrades Mobile Trading category score from 3 stars in our 2013 Review to 4 stars in our 2014 Review.

Also in 2013, Scottrade introduced an industry first FRIP (Flexible Reinvestment Program). A FRIP is similar to a DRIP (Dividend Reinvestment Program), except that investors can customize how the dividend is used. Reinvestable dividends can be used to purchase shares in up to five different eligible securities (exceptions include OTCBB stocks). The FRIP is an industry first, and the clients I spoke with love it.

Final Thoughts

Scottrade, with its network of more than 500 branch offices and award-winning customer service, offers clients a large selection of investments and quality research to make educated investment decisions. While the broker is limited in its offering of advanced platforms and tools, Scottrade is a strong consideration for every other investor type, whether you're planning for retirement, just got your first job, or simply are a casual investor.


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

Scottrade is an online broker with a very straightforward pricing structure.

Stock Trades - All stock trades are $7 per trade with no limits on the number of shares traded. For stocks priced under $1, an additional .5% fee of the principal value will be added to the $7 base commission rate.

Options Trades - Options trades cost just $7 + $1.25 per contract.

Mutual Funds - Mutual funds cost $17.00 per trade. Additional fees may apply depending on the fund.

International Trading - Scottrade also offers trading services for China through the Chinese version of its website.

Trade Commissions Breakdown

$7.00 Stock Trade Fee (flat)*
N/A Stock Trade Fee (per share)*
$7.00 Options Base Fee*
$1.25 Options Per Contract Fee*
$17.00 Options Exercise Fee
$17.00 Options Assignment Fee
$17.00 Mutual Fund Trade Fee
$32.00 Broker Assisted Trades Fee
$500.00 Minimum Deposit

Margin Rates

7.75% Under $24,999.99
7.25% $25,000.00 to 49,999.99
6.75% $50,000.00 to $99,999.99
6.50% $100,000.00 to $249,999.99
6.25% $250,000.00 to $499,999.99
5.75% $500,000.00 to $999,999.99
5.25% Above $1,000,000.00

Miscellaneous Fees

$0.00 Bond Trade Fee
$0.00 Treasury Trade Fee
$0.00 CD Trade Fee
$32.00 IVR Trade Fee
$0.00 IRA Annual Fee
$0.00 IRA Closure FEe
$25.00 Forced Margin Sellout Fee
$75.00 Returned ACH Fee
$25.00 Returned Wire Fee
$0.00 Stock Certificate Processing Fee
$0.00 Stock Certificate Delivery Fee
$2.00 Paper Statement Fee
$1.00 Paper Confirmation Fee
$25.00 Domestic Wire Fee
$40.00 International Wire Fee

Broker Ratings

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

Broker Awards

2014

Scottrade was awarded Best in Class for Education, Mobile Trading, and New Investors. They also received #1 for Overall Client Experience and #1 New Tool for Scottrade FRIP. Read the 2014 Online Broker Review.

2013

Scottrade was awarded Best Overall Client Experience, rated 4.5 stars for Education, 4 stars for Customer Service, Research, and Ease of Use, and had several Top 10 Category finishes. Read the 2013 Broker Review.

2012

Scottrade was 5 Stars Overall and received Best in Class for Ease-of-Use, Customer Service, and Investor Education. In addition they were named Best Overall Client Experience. Read theĀ 2012 Broker Review.

Offering of Investments

Yes Stock Trading
Yes Options Trading
Yes Mutual Funds
Forex Trading
Futures Trading
Yes OTCBB / Pink Sheets
Yes DRIPs
Yes After Hours Trading
0 Commission Free ETFs
503 Retail Locations
7386 Mutual Funds (Load)
7598 Mutual Funds (No Load)
3114 Mutual Funds (NTF)
14984 Mutual Funds (Total)
4 Complex Options Max Legs
Self-clearing Clearing Firm
Yes No Maintenance Fees
No Minimum Deposit
Yes No Fee IRAs
Yes Broker Assisted Trades

Research

Yes Mutual Funds Research
Yes Pink Sheets / OTCBB Research
Yes Fixed Income Research
Yes Global Market Overview
Yes Equity Research - SEC Filings
Yes ETF Research - Top 10 Holdings
Yes ETF Research - 3rd Party Reports
Yes Fund Research - Strategy Overview
Yes Fund Research - 3rd Party Reports
Yes Fund Research - Fees Breakdown
Yes Fund Research - 3rd Party Ratings
Yes Screener - Stocks
Yes Screener - ETFs
Yes Screener - Funds
Screener - Options
Yes Screener - Bonds

Banking

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

Customer Service

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

Recommended For

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

Mobile Trading

Yes iPhone App
Yes iPad App
Yes Android App
Yes Mobile Site

Platforms & Tools

Yes Virtual Trading
Yes Web Platform
Yes Desktop Platform
Mac Platform
Yes Platform Backtesting
Yes Trade Hot Keys
Yes Streaming Time & Sales
Yes Level 2 Quotes
Streaming CNBC TV
Yes Sitewide Real-time Quotes
Yes Watchlist Streaming Real-time Quotes
Yes Options - Chains Basic View
Yes Options - Chains Spreads View
Yes Options - Greeks Analysis

Active Trading

Internalizes Trades
Yes Receives Payment for Order Flow
Direct Market Routing (Stocks)
Client Liquidity Rebates
3500 # of Easy to Borrow Stocks

Education

Yes Investor Dictionary
Yes Live Seminars
Yes Investor Community

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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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