Published by Blain Reinkensmeyer
On Sunday, January 25th, 2015 .
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.
More than 500 local branch offices; FRIP (Flexible Reinvestment Program), a great spin on DRIP; easy-to-use mobile apps.
ScottradeELITE requires $25,000 minimum; weak in-house options capabilities - instead offers OptionsFirst platform powered by OptionsHouse for advanced options trading.
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.
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.
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.
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.
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.
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.
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 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.
All pricing data was obtained from a published web site as of 11/01/2014 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.