Charles Schwab Review
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Founded in 1973 and headquartered in San Francisco, Charles Schwab is an iconic brand with which most investors are familiar. The full-service broker is home to $3.53 trillion in total client assets, and provides services ranging from stocks, options, and futures trading to full, FDIC-backed banking services, to comprehensive retirement solutions. In total, Charles Schwab serves 11.6 million active brokerage accounts, 1.3 million banking accounts, and 1.7 million retirement plan participants.
Charles Schwab’s focus is seeing the world “Through Clients’ Eyes,” which means delivering products and services customers want and leading industry trends, instead of following them.
Review Summary
Founded in 1973, Charles Schwab is a full-service brokerage with over $3 trillion in total client assets. As a low-cost leader offering $4.95 stock trades, Charles Schwab provides investors excellent stock research, quality trade tools, and professional planning for the future.
Benefits
- Industry-leading research.
- StreetSmart Edge platform is easy to use and feature rich.
- Excellent phone support.
Considerations
- Poor email support.
- Primary mobile app does not include real-time streaming quotes.
Special Offer:
- $4.95 online equity trades + $0.65 per options contract Open Account
Offering of Investments
Like other full-service brokers, Schwab delivers a full suite of products and services. Charles Schwab provides a full offering, from stock and options trading to fixed income and retirement guidance. This includes every account type under the sun including Individual, Joint, Traditional IRA, Roth IRA, Rollover IRA, Inherited IRA, Custodial IRA, 529 plans, charitable accounts, and even estate and trust accounts. The list goes on and on.
For retirement, account services does beyond offering IRA accounts for self-direct investors. Customers can also elect to have their assets managed through Schwab's robo advisor service, Intelligent Portfolios. For human advice, Intelligent Portfolios Premium provides clients unlimited one on one guidance from a Certified Financial Planner (CFP) for $30/month, after a $300 one-time planning fee. No question, Schwab ranks as our top broker for IRAs.
To find flaws Schwab's offering, you have to step away from the core trading services of stocks, etfs, mutual funds, and bonds. Schwab does not offer forex trading. Also, while futures trading is offered, trading must be conducted on the StreetSmart Central platform specifically, which means you cannot use the main Schwab website, nor StreetSmart Edge, to place futures trades.
| Feature | Charles Schwab |
|---|---|
| Stock Trading | Yes |
| OTCBB / Pink Sheets | Yes |
| Options Trading | Yes |
| Complex Options Max Legs | 4 |
| Options Exercising (Web) | No |
| Options Exercising (Phone) | Yes |
| Bonds (US Treasury) | Yes |
| Bonds (Corporate) | Yes |
| Bonds (Municipal) | Yes |
| Futures Trading | Yes |
| Forex Trading | No |
| Mutual Funds (No Load) | 5846 |
| Mutual Funds (Total) | 5846 |
| DRIPs | Yes |
| Advisor Services | Yes |
| Offering of Investments |
Commissions & Fees
For trading stocks or options, Charles Schwab is ahead of most of its closest full-service competitors. Stock trades are $4.95 stock trades and the broker offers 503 commission-free ETFs alongside 3,422 NTF (no transaction fee) mutual funds. Even better for investors, Charles Schwab is the only broker alongside Fidelity to list the price improvement received on eligible orders, which is important transparency for order execution quality.
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 $4.95. Our research found no additional fees or charges for trading stocks under $1 (penny stock trading) 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 $4.95 + $0.65 per contract.
- Mutual Funds - All transaction fee mutual funds cost $49.95 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.
| Feature | Charles Schwab |
|---|---|
| Minimum Deposit | $0.00 |
| Stock Trade Fee (per trade) | $4.95 |
| ETF Trade Fee | $4.95 |
| Options Base Fee | $4.95 |
| Options Per Contract Fee | $0.65 |
| Mutual Fund Trade Fee | $49.95 |
| Broker Assisted Trades Fee | $25.00 |
| Commission-Free ETFs | 503 |
| Commissions & Fees |
Like other full-service brokers, Charles Schwab charges higher margin rates than most discount online brokers. However, when compared to other full-service broker competitors like TD Ameritrade, E*TRADE, and Fidelity, Charles Schwab's pricing is competitive.
| Feature | Charles Schwab |
|---|---|
| Margin Rate Under $24,999.99 | 9.575% |
| Margin Rate $25,000.00 to $49,999.99 | 9.075% |
| Margin Rate $50,000.00 to $99,999.99 | 8.125% |
| Margin Rate $50,000.00 to $99,999.99 | 8.125% |
| Margin Rate $100,000.00 to $249,999.99 | 8.075% |
| Margin Rate $250,000.00 to $499,999.99 | 7.825% |
| Margin Rate $500,000.00 to $999,999.99 | 6.575% |
| Margin Rate Above $1,000,000.00 | 6.25% |
Last in trading fees and commissions, Charles Schwab's miscellaneous account fees are transparent and not over priced. In fact, compared to most brokers, Charles Schwab and Fidelity charge among the lowest account fees to customers.
| Feature | Charles Schwab |
|---|---|
| IRA Annual Fee | $0.00 |
| IRA Closure Fee | $50.00 |
| Returned ACH Fee | $25.00 |
| Returned Wire Fee | $25.00 |
| Stock Certificate Processing Fee | $100.00 |
| Stock Certificate Delivery Fee | N/A |
| Paper Statement Fee | $0.00 |
| Paper Confirmation Fee | $0.00 |
| Domestic Wire Fee | $25.00 |
| International Wire Fee | $25.00 |
Research
Charles Schwab provides among the highest quality of research of all the brokers I've tested here at StockBrokers.com. Schwab’s in-house research is terrific, thanks largely to its 25 staff experts, including Liz Ann Sonders, Randy Frederick, Lee Bohl, and Kathy Jones, who consistently produce institutional quality research.
Here is an overview of the Charles Schwab market research experience, which includes complete coverage for stocks, ETFs, mutual funds, and bonds.
| Feature | Charles Schwab |
|---|---|
| Research - Stocks | Yes |
| Screener - Stocks | Yes |
| Research - ETFs | Yes |
| Screener - ETFs | Yes |
| Research - Mutual Funds | Yes |
| Screener - Mutual Funds | Yes |
| Research - Pink Sheets / OTCBB | Yes |
| Research - Fixed Income | Yes |
| Screener - Bonds | Yes |
Taking a look now at stock research, beyond offering traditional third-party ratings, Schwab’s proprietary equity ratings add value to the research experience. Schwab Live streaming events and market commentary are frequently fresh and engaging. Even better, daily broadcasts are offered, a feat matched only by TD Ameritrade.
On the downside, Schwab’s research needs to freshen up its design, which is not as intuitive as Fidelity's, although on a purely feature-by-feature tally, both provide nearly identical offerings.
| Feature | Charles Schwab |
|---|---|
| Stock Research - Reports | 8 |
| Stock Research - Earnings | Yes |
| Stock Research - Insiders | Yes |
| Stock Research - Metric Comp | Yes |
| Stock Research - SEC Filings | Yes |
| Stock Research - Social | Yes |
| Stock Research - Balance Sheet | Yes |
| Stock Research - Cash Flows | Yes |
| Stock Research - News | Yes |
| Stock Research - ESG | No |
Looking at researching ETFs with Charles Schwab, like stocks, there is a lot to like. Thanks to third-party providers like Morningstar, Charles Schwab covers everything investors need to conduct thorough research for ETFs.
| Feature | Charles Schwab |
|---|---|
| ETFs - Strategy Overview | Yes |
| ETFs - Top 10 Holdings | Yes |
| ETFs - Sector Exposure | Yes |
| ETFs - Risk Analysis | Yes |
| ETFs - Performance Analysis | Yes |
| ETFs - Ratings | Yes |
| ETFs - Morningstar StyleMap | Yes |
| ETFs - Reports | Yes |
Finally, assessing the mutual funds research area at Charles Schwab, like stocks and ETFs, the experience is also terrific. Again, thanks to Morningstar, customers can dive into research reports, mutual fund fees, performance charts, portfolio allocation, fund holdings, and more.
| Feature | Charles Schwab |
|---|---|
| Mutual Funds - Strategy Overview | Yes |
| Mutual Funds - Prospectus | Yes |
| Mutual Funds - Reports | Yes |
| Mutual Funds - Fees Breakdown | Yes |
| Mutual Funds - Top 10 Holdings | Yes |
| Mutual Funds - Asset Allocation | Yes |
| Mutual Funds - Sector Allocation | Yes |
| Mutual Funds - Country Allocation | Yes |
| Mutual Funds - StyleMap | Yes |
| Mutual Funds - 3rd Party Ratings | Yes |
Trading Platforms & Tools
Charles Schwab currently offers customers access to three platforms: StreetSmart.com (web based; everyday investors), StreetSmart Edge (desktop based; active traders), and StreetSmart Central (web based; futures trading). While each platform has its highlights and lowlights, all in all, Schwab does a good job and will satisfy most customers. For example, the StreetSmart.com platform is way overdue for a design and functionality overhaul.
Here's a high-level overview of the trading platforms Charles Schwab has to offer for online trading. It is easy to see that Schwab has all its main bases covered here, with the one main exception being paper trading, which is a nice feature for beginners. With paper trading, you use virtual funds to trade stocks, etfs, and options. Despite this drawback, Schwab does provide a great education lineup for new investors, more on that later.
| Feature | Charles Schwab |
|---|---|
| Desktop Platform (Windows) | Yes |
| Desktop Platform (Mac) | Yes |
| Web Platform | Yes |
| Paper Trading | No |
| Trade Journal | Yes |
| Watch Lists - Total Fields | 108 |
| Two-Factor Authentication Login | Yes |
| Heat Mapping | Yes |
As far as stock charts go, Charles Schwab does a good, although though there is some minor room for improvement. While everyday investors will find everything that need to perform basic technical analysis, more experienced traders will see the lack of technical indicators, for example, to be a drawback. If there is one aspect of charting on Schwab that I do love, it is the intuitive design, which is really easy to learn.
| Feature | Charles Schwab |
|---|---|
| Charting - Trade Off Chart | Yes |
| Charting - Indicators / Studies | 41 |
| Charting - Drawing Tools | 15 |
| Charting - Historical Trades | No |
| Charting - Corporate Events | Yes |
| Charting - Automated Analysis | Yes |
| Charting - Save Profiles | Yes |
| Charting - Study Customizations | 6 |
| Charting - Custom Studies | No |
StreetSmart Edge provides most of the bells and whistles active traders and day traders need to succeed. I find the platform easier to learn than say TD Ameritrade and TradeStation, although the latter two provide a richer experience overall. On the downside, the StreetSmart Edge platform is not the fastest and isn’t ideal for traders looking to stream, say, 10 stock charts at once across multiple monitors. Here's an look at all the functionality Charles Schwab provides to seasoned stock traders. See also: Best Brokers for Day Trading.
| Feature | Charles Schwab |
|---|---|
| Stock Alerts - Basic Fields | Yes |
| Stock Alerts - Advanced Fields | Yes |
| Streaming Time & Sales | Yes |
| Streaming TV | Yes |
| Direct Market Routing - Stocks | Yes |
| Direct Market Routing - Options | No |
| Ladder Trading | No |
| Trade Hot Keys | Yes |
| Level 2 Quotes - Stocks | Yes |
| Level 2 Quotes - Options | Yes |
| Trade Ideas - Backtesting | Yes |
| Short Locator | No |
| Client Liquidity Rebates | No |
Finally, let's take a closer look at the options trading features Charles Schwab offers. Much of the innovative options features Schwab provides traders trace back to the broker's acquisition of optionsXpress back in 2011. For example, the proprietary Walk Limit order type is great for options traders. All in all, Schwab provides a great experience for options traders. See also: Best Options Trading Brokers.
| Feature | Charles Schwab |
|---|---|
| Option Chains - Streaming | Yes |
| Option Chains - Total Columns | 41 |
| Option Chains - Greeks | 5 |
| Option Chains - Quick Analysis | Yes |
| Option Analysis - P&L Charts | Yes |
| Option Probability Analysis | Yes |
| Option Probability Analysis Adv | Yes |
| Option Positions - Greeks | Yes |
| Option Positions - Adv Analysis | Yes |
| Option Positions - Rolling | Yes |
| Option Positions - Grouping | Yes |
Customer Service
To score Customer Service, StockBrokers.com partners with customer experience research group Confero to conduct phone tests from locations throughout the United States. For our 2019 Broker Review, 300 customer service tests were conducted over ten weeks.
Overall, Charles Schwab provides fantastic phone service for its customers. In years past, we tested email as well. It should be noted we consistently had poor experiences with email. No question, picking up the phone and calling Schwab is the way to receive the best customer service service.
Results
- Average Connection Time: <1 minute
- Average Net Promoter Score: 8.9 / 10
- Average Professionalism Score: 8.6 / 10
- Overall Score: 8.87 / 10
- Ranking: 2 nd (16 brokers)
- View Infographic
Mobile Trading Apps
Charles Schwab provides a consistent and generally enjoyable experience for mobile trading, regardless of the device; however, its mobile apps lack core functionality in two key areas: alerts and quotes. Here are some screenshots from the Schwab Mobile iPhone app.
Schwab's mobile apps offer full support for trading everything from stocks to mutual funds and complex options. For stock trading specifically, customers can trade essentially every order type, including after-hours trades. Conditional orders are missing from the features list; however, this is very minor since conditional orders are used almost exclusively by active traders anyway.
| Feature | Charles Schwab |
|---|---|
| iPhone App | Yes |
| Android App | Yes |
| Apple Watch App | Yes |
| Trading - Stocks | Yes |
| Trading - After-Hours | Yes |
| Trading - Conditional Orders | No |
| Trading - Mutual Funds | Yes |
| Trading - Simple Options | Yes |
| Trading - Complex Options | Yes |
| Trading - Option Rolling | No |
Looking at mobile app features, the biggest area where Schwab needs to improve is with its use of market data. No basic stock price alerts can be set, quotes are in real time but require manual refreshing, and watch lists auto refresh once every ten seconds, whereas Schwab’s closest competitors all offer streaming quotes.
Looking at some areas Schwab does a good job with its mobile trading app, research is thorough. For example, options traders will love the Idea Hub tool, which is unique to Schwab mobile and makes screening and then filtering through options trade ideas a breeze.
| Feature | Charles Schwab |
|---|---|
| Watch List Syncing | Yes |
| Stock Alerts - Basic Fields | No |
| Stock Alerts - Advanced Fields | No |
| Charting - After Hours | No |
| Charting - Drawing | No |
| Charting - Study Customizations | Yes |
| Customizable Homescreen | No |
| Heatmapping | Yes |
| Stream Live TV | Yes |
| Barcode Lookup | No |
Banking
Among the bank and brokerage combinations in our annual review, Charles Schwab offers a full suite of services, and competes with the best in the industry. With 357 service locations, Charles Schwab is a registered member of the Federal Deposit Insurance Corporation (FDIC), which insures bank deposits up to $250,000.
The downside to banking with Charles Schwab is that the online brokerage offers no loyalty rewards for using multiple products, which is where Bank of America Merrill Edge reigns supreme. By comparison, both Merrill Edge and Chase You Invest Trade offer free trades for customers who maintain certain combined account balances. See: Best Brokers for Banking Services.
| Feature | Charles Schwab |
|---|---|
| Retail Locations | 357 |
| Member FDIC | Yes |
| Checking Accounts | Yes |
| Savings Accounts | Yes |
| Credit Cards | Yes |
| Debit Cards | Yes |
| Mortgage Loans | Yes |
| No Fee Banking | Yes |
| Banking |
Beginners and Investment Education
Charles Schwab delivers a thorough educational experience that will satisfy most investors. Through Schwab's Learning Center, all investing topics covered, from stock trading to retirement. At least 50 free webinars offered each month to current customers. Webinars are also archived for viewing on demand.
Downsides of the Charles Schwab education offering center around more robust learning functionality. There is no progress tracking available to track what educational content you’ve completed or where you last left off. Also, no interactive learning tools, such as quizzes, are provided. See: Best Brokers for Beginners
| Feature | Charles Schwab |
|---|---|
| Has Education - Stocks | Yes |
| Has Education - ETFs | Yes |
| Has Education - Options | Yes |
| Has Education - Mutual Funds | Yes |
| Has Education - Fixed Income | Yes |
| Has Education - Retirement | Yes |
| Paper Trading | No |
| Videos | Yes |
| Webinars (Monthly Avg) | 50 |
| Webinars (Archived) | Yes |
| Live Seminars | Yes |
| Progress Tracking | No |
| Interactive Learning - Quizzes | No |
| Investor Magazine | Yes |
| Education |
Final Thoughts
Charles Schwab is a respected worldwide brand with a very balanced offering. Customers have access to a plethora of quality research and innovative trade tools, not to mention low trading costs alongside several hundred commission-free ETFs and thousands of commission-free mutual funds.
Beyond ranking as an industry leader for independent investing, investors interested in life planning, personalized strategies for their portfolios, and making the most of retirement will also find Schwab a great fit. In 2019, Schwab’s tagline holds true, “Own Your Tomorrow.”
Methodology
For the StockBrokers.com ninth annual review published in February 2019, a total of 4,544 data points were collected over six months and used to score brokers. Each broker completed an in-depth data profile and provided executive time (live in person or over the web) for an annual update meeting. This makes StockBrokers.com home to the largest independent database on the web covering the online broker industry.
Participation is required to be included. Each broker completed an in-depth data profile and provided executive time (live in person or over the web) for an annual update meeting. We take pride in StockBrokers.com data quality because it is 100% verified by the industry itself. As part of our process, we hand check and validate each data point to ensure its accuracy.
This rigorous data validation process yields an >error rate of less than .001% each year, providing site visitors quality data they can trust. Learn more about how we test.
About the author: Blain Reinkensmeyer As Head of Research at StockBrokers.com, Blain Reinkensmeyer has 18 years of trading experience with over 1,000 trades placed during that time. Referenced as a leading expert on the US online brokerage industry, Blain has been quoted in The New York Times, Forbes, and the Chicago Tribune, among others.
