UPDATE August 23rd, 2018 – Firstrade has gone commission-free. Moving forward, all stock, ETF, mutual fund, and options trades will be $0. Previously, Firstrade was already competitive, offering investors flat-fee stock trades for $2.95 each and options trades for $2.95 plus $.50 per contract. Firstrade also had the second largest offering of commission-free ETFs at 703.
Founded in 1985, Firstrade has a long history of providing value for its customers. Known for its excellent Chinese-speaking customer service and easy-to-use website, Firstrade offers completely free trading.
Although Firstrade trails behind the largest industry leaders, such as Fidelity and Charles Schwab, in key areas like research and trading tools, among others, those brokers charge more across the board. Compared to similar deep discount brokers, Firstrade provides value throughout the experience, as we explore here.
Commissions & Fees
When it comes to trades, Firstrade keep things simple, offering investors completely free stock, ETF, mutual fund, and options trades.
John Liu, Firstrade’s founder and chief executive officer commented on the broker’s move into free trading in August 2018, “The time has come for online brokers to meet the future of investing, it’s called wealth management at no cost. Free trading, coupled with our ongoing commitment to provide self-directed customers with the best possible tools and resources to make wise investing decisions, makes us the ideal platform for all self-directed investors. This announcement is a natural progression for us as we continue to deliver for our customers through our advanced technologies, customer service and now, no-cost trading.”
|View All Fees||Firstrade||Ally Invest||Fidelity||Charles Schwab||Merrill Edge|
|Stock Trade Fee (flat)||$0.00||$4.95||$4.95||$4.95||$6.95|
|Options Base Fee||$0.00||$4.95||$4.95||$4.95||$6.95|
|Options Per Contract Fee||$0.00||$0.65||$0.65||$0.65||$0.75|
|Mutual Fund Trade Fee||$0.00||$9.95||$49.95||$49.95||$19.95|
|Broker Assisted Trades Fee||$19.95||$20.00||$32.95||$25.00||$29.95|
|Commissions & Fees|
While Firstrade provides a foundation for quality research that most investors will find sufficient, compared to its large, full-service competitors, weaknesses are quite apparent.
As far as research goes, Firstrade offers customers a well-balanced experience, thanks to its use of Morningstar as its primary provider. 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 offers its customers thorough research for stocks, ETFs, and mutual funds. Firstrade extended its offering by adding a new Video Commentary section in 2015, which provides market analysis from Morningstar. Having said that, however, Firstrade still has room for improvement, depending on the broker comparison.
Firstrade offers only one third-party research report for stocks, one for ETFs, and none for mutual funds. Compared to other deep discount brokers, Firstrade shines, as its competitors provide none. However, pay just $2 more per trade and you can access 12 third-party research reports Fidelity offers for equities alone.
Screening is another area that is generally weaker than the higher priced competition. On the plus side, Firstrade does offer fairly robust screeners for stocks, ETFs, and mutual funds, which include Morningstar criteria filters such as “star rating” and “Stylebox.” On the cons side, however, the user experience is noticeably outdated, the number of criteria to filter with is weak, and the selection of predefined screens could be extended. Bonds screening is also not available.
While Firstrade provides a foundation for quality research that most investors will find sufficient, compared to its large, full-service competitors, weaknesses are quite apparent, and the value proposition becomes difficult to defend.
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 2018 Broker Review, 260 customer service tests were conducted over ten weeks. The data collected is institutional grade and sets the current industry benchmarks.
- Average Connection Time: 1 - 2 minutes
- Average Net Promoter Score: 7.3 / 10
- Average Professionalism Score: 6.7 / 10
- Overall Score: 7.31 / 10
- Ranking: 11th (13 brokers)
- View Infographic
Platforms & Tools
Firstrade Navigator is built entirely in-house using HTML 5 code, which makes it flexible and future ready.
In previous years, Firstrade used to suffer from offering only a Java-based X-Stream watch list tool, which was extremely limited in depth and functionality. Fortunately, that all changed with the launch of Firstrade Navigator in 2016.
Firstrade Navigator is built entirely in-house using HTML 5 code, which makes it flexible and future ready. The platform is split into three customizable columns – the left and right sidebar can be collapsed if desired) – which can be customized to suit the customer’s personal preferences. Streaming quotes are also found throughout.
Improvements over the previous X-Stream platform are so extensive it’s not worth a direct comparison. Instead, I focused on testing Firstrade Navigator as a brand-new experience.
Before diving into functionality, it is important to mention that Firstrade Navigator is available only to Firstrade Premier customers, which means having an account balance of at least $10,000. Even without Premier status, however, customers can still access the platform’s streaming real-time quotes watchlist through the website.
The center headline of the platform includes three pie charts summarizing the most important components of the customer’s account: order summary, positions summary, gainers vs. losers, and a high-level portfolio allocation breakdown (this entire row can be flipped to display any recent account notifications). Below this lie daily return summaries of the three major indices.
Like the rest of the Firstrade experience, Navigator is geared for ease of use. The color scheme is clean, although there is only one default option as I write this, and I would prefer seeing more traditional green and red coloring in the context of individual equity returns. If you have your watch list on the left sidebar, you can easily expand it into the primary center area to enlarge it.
While Firstrade Navigator has a strong foundation, there are multiple weaknesses with the platform since it is still so new. I found watchlists only have 13 optional columns, whereas the website’s watchlist offers 57. The same goes for charts that offer no drawing tools, whereas the website offers five.
Charts in Navigator include 58 optional indicators, which is decent – the industry average is 106 – but they cannot be enlarged beyond the center column. Popping out charts into their own separate window to maximize sizing is critical for performing clean technical analysis, not to mention allowing multiple charts at once. The charting also lacks the ability to save custom profiles, although you can adjust the default view.
A final point is that the website and Navigator cannot be used simultaneously. Customers can only be logged into one or the other, which was a bit annoying as I had to constantly swap sessions to conduct research then jump back to Navigator to monitor my portfolio.
Navigator drawbacks aside, the bottom line is that Firstrade Navigator offers a platform experience built from scratch that is miles ahead of its predecessor. Without question, I see a bright future for Firstrade in the customer tools department.
Outside of Navigator, Firstrade also added OptionsPlay to its list of tools in 2016. While not easy to find within the website – customers have to load an option chain then click a single “Options Wizard” link in the upper right corner – the OptionsPlay platform is excellent. With OptionsPlay, ideas are scanned for and presented in the left column, a chart and summarized technical analysis are focused in the center column, then three unique trade ideas are revealed, rated, and explained in the third column. It is a great tool for casual and seasoned investors alike.
When Firstrade first added OptionsPlay, options trading through the website was supported only up to a maximum of two legs. Today, in 2018, customers can trade up to four legs online, which unlocks a slew of new options trade ideas through the OptionsPlay platform.
Overall, Firstrade provides fantastic value with its offering of trader tools compared to its closest deep discount competitors. Platforms such as Navigator and OptionsPlay are not typically offered by brokers charging $2.95 per trade.
Ease of Use
Firstrade's website is not only well designed, but also easy to navigate.
One area in which Firstrade shines is 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 customers. 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 customer dashboard is well constructed, clean, and customizable. Customizable dashboards are becoming increasingly popular with customers, offering them a clear view of everything important to them upon login. While Firstrade's customer dashboard doesn’t match that of Trade Source from Charles Schwab (our personal favorite on the web), the broker has done a good job.
Logging in is also a straightforward and secure process. Our one gripe with Firstrade’s website used to be the login process, which took a turn for the worse 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 quite annoying. Heeding our advice, Firstrade updated its login PIN to match a standard keypad found at your everyday ATM.
Our testing left us fairly impressed, particularly with its ease of use.
On the mobile trading front, Firstrade offers an iPhone, iPad, and Android smartphone app, but not an Android tablet app. In summary, our testing left us fairly impressed, particularly with its ease of use.
Firstrade’s mobile app supports Touch ID (fingerprint login) and real-time streaming quotes throughout the app. Options chains and charting provide a clean experience; 19 technical studies are available for stock charts.
Beyond these core features, Firstrade’s mobile app lacks depth, which is acceptable for a broker charging $2.95 per trade.
In 2017, Firstrade launched its first iPad tablet app, Firstrade Navigator, which replicates the entire platform, and unlike the web platform variant, the mobile app version is open to all customers.
Looking ahead at 2018, our wish list for Firstrade’s mobile experience is that it adds alert functionality, the ability to view charts in horizontal landscape mode, and after-hours charts, to name three features. See: Best Brokers for Mobile Trading.
Firstrade’s support for Chinese-speaking customers goes beyond 24/7 customer service. The broker also offers a fully translated customer experience.
Firstrade’s support for Chinese-speaking customers goes beyond 24/7 customer service. The broker also offers a fully translated customer experience. This includes not only the website but also a variety of educational materials such as a weekly blog, an annual trading contest, and even a trading reality show. Furthermore, foreign customers can easily renew their Form W-8BEN certificates entirely online through the website, which was a new offering in 2017.
Firstrade is unique in the industry with its Securities Lending Income Program. Through the program, customers who hold securities long in their account can opt in to lend those shares to a marketplace of short sellers operated by Firstrade’s clearing provider, Apex. Any stocks that are shorted earn the customer revenue, which is credited to their account automatically.
While Firstrade offers a well-organized website, user-friendly tools and quality research, the broker lacks the depth to compete with the higher priced big full-service brokers.
That said, investors looking for a low-cost, well balanced, all round easy-to-use broker will find Firstrade a great fit. And, for Chinese-speaking investors, Firstrade is also a winner.
For our 2018 Stock Broker Review we assessed, rated, and ranked 13 different online brokers over a period of six months. In total, we conducted 260 customer service tests, collected 3,796 data points, and produced over 40,000 words of research. How we test.
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Reviewed by Blain Reinkensmeyer Blain heads research at StockBrokers.com and developed the site's annual review format, which broker executives consider the most thorough in the industry. He has placed over 1,000 stock, options, forex, and crypto trades since 2001.
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