Charles Schwab Review
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.
Top Takeaways for 2019
After spending six months testing 16 online brokers for our ninth annual stock broker review, here are our top findings on Charles Schwab:
- Charles Schwab is terrific for retirement and is our No 1 pick for IRA accounts in 2019.
- From stocks to bonds and banking, as a full-service brokerage, Schwab has a fantastic, diverse offering of investments that will satisfy any investor.
- Alongside retirement, Schwab's shining star is its offering of stock market research tools and reports. For the eighth year in a row, Schwab finished Best in Class (top 5) for Research in our assessment.
- In our nationwide testing, we found Schwab's phone service to be terrific.
- Schwab trading platforms are robust and will satisfy the majority of traders, making it a good choice for day trading and options trading.
- Schwab's provides new investors a thorough selection of educational materials. Combined with an easy to use website, Schwab is a winner for beginners.
- Schwab's mobile app is feature-rich but left us wanting more as far as mobile trading is concerned. For example, real-time streaming quotes are not offered.
- $4.95 online equity trades + $0.65 per options contract Open Account
|Commissions & Fees|
|Offering of Investments|
|Platforms & Tools|
|Ease of Use|
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.
Retirement: For retirement, account services goes 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.
Other investments: To find flaws in 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.
Commissions & Fees
For trading stocks or options, Charles Schwab is ahead of most of its closest full-service competitors. Stock trades are $4.95, options trades are $4.95 + $0.65 per contract, 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.
Other trading fees: 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.
Mutual fund commissions: 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.
Schwab pricing summary:
|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|
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.
Stock research: Taking a look 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.
ETFs research: Looking at researching ETFs with Charles Schwab, 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.
Mutual funds research: 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.
Schwab market research screenshots:
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.
Trading platforms: Assessing the trading platforms Charles Schwab has to offer, Schwab has its bases covered, less offering paper trading 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.
Stock charts: As far as stock charts go, Charles Schwab does a good job, 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.
Day trading: 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. See also: Best Brokers for Day Trading.
Options trading: Finally, taking 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.
Schwab trading platform screenshots:
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.
- 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)
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.
Trading support: 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.
Market research: Schwab also does a good job with market research, which 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.
Mobile app pros aside, 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.
Schwab mobile app screenshots:
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.
Loyalty rewards: 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.
Beginners and Education
Charles Schwab delivers a thorough educational experience that will satisfy most beginners. 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.
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.”
About Charles Schwab
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.
2019 Review Methodology
For the StockBrokers.com ninth annual best online brokers review published in February 2019, a total of 4,544 data points were collected over six months and used to score brokers. 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. Our 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.