The Best Stockbrokers for January 2023

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In the long run, the stock market is one of the best places to put your money to work.

Now, most investors buy and sell stocks through online brokers. And the competition among the best online stockbrokers has never been greater.

If you’re ready to jump in to invest, we’re here to help. Our team of experts has compiled a list of the best trading platforms and what you should look for to help you get started.

Full Service vs. Discount Brokers

Just as the process of processing stock trading has changed, the terms we use for the people and companies that facilitate trading have also changed. Today, instead of using the term “stockbroker” as an all-encompassing term for any person or brokerage firm that trades stocks, we generally divide companies into two categories: “discount brokers” and “full-service brokers,” labels that better describe what they actually do.

Discount Brokers

An online stockbroker is a discount broker. They are not in the business of giving you advice or calling you with stock options. Instead, discount brokers focus on basic services to help you buy or sell stocks (or other types of investments) from the comfort of your own home. Since discount brokers forget about many luxuries, they may charge the lowest prices for their services. The best online stockbrokers charge $0 for doing stock trading, bargaining, especially considering what traditional brokers charge. In addition, discount brokers tend to have lower minimum investment requirements (or no minimums at all), making them accessible to everyone.

Full Service Broker

The brokerage firms we label as “full-service brokers” are most closely associated with brokers in the past. Full-service brokers often hire human brokers who can help you make trades, find mutual funds to invest in, or create retirement plans. That said, full-service brokers are expensive, because people are definitely more expensive than computers. The popular full-service broker charges a minimum of $75 to trade stocks, and it can soar up to $500 or more to buy a large number of stocks. Buying a mutual fund through a full-service broker can potentially cost you thousands of dollars, as they often charge a fee equivalent to a portion of the amount you invest. Full-service brokers are more likely to have higher account minimums; Some advisors only work with clients who have assets of $1 million or more.

Realistically, the line between the two types of corridors began to blur. Discount brokers now have wealth management services that offer human advisory assistance at full-service prices. Some full-service brokers also offer basic levels of service at discounted prices. For example, Merrill Edge® Self-Directed is a discount brokerage branch of the full-service broker Merrill Lynch.

What is an online stockbroker?

An online stockbroker is a financial company whose clients can buy and sell shares on a brokerage account through an online trading platform. You can think of an online stockbroker as a conduit to the stock exchange. In exchange for a commission on each trade, these brokers ship their orders to stock exchanges and market makers, who really do the heavy lifting of matching your buy order to someone who wants to sell, or vice versa.

But you can’t just buy stocks through your bank account or call a company and buy stocks, you need to find one of the best stockbrokers.

Fortunately for everyday investors, the brokerage industry has changed dramatically over the past two decades. To buy stocks, you used to have to call a person known as a stockbroker, who placed an order on your behalf. This process is complicated and expensive.

You and I can’t knock on the door of the stock exchange and trade without a broker. Actually, the stock exchange as we think of their portrayal in film and on television does not really exist today. Most of the actual trade takes place between computers in dimly lit server rooms in New Jersey, just a few miles from New York City’s financial district.

 

How to choose the best stockbroker

The best online brokerage account for you depends on your needs. Here are a few things you might want to consider:

  • If you plan to only buy and hold stocks, you may not need a full-featured trading platform.
  • If you primarily plan to buy mutual funds, you should look for the best mutual fund brokers, as these brokerage accounts offer low commissions at $0 for buying and selling mutual funds.
  • If you are a new investor and only want to invest a few hundred dollars at first, you may want to find a broker with no minimum investment requirements.

If you plan to trade bonds or stock options, or plan to trade over the phone instead of online, be sure to compare what the best brokers charge for this activity.

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Features of the best trading platforms

The best brokerage accounts on our list offer a variety of free stock trading apps, different educational resources, and more. With that in mind, here are some of the features we observe when deciding which online stockbrokers are the best in the business and why they are important to you:

  • Commissions and fees : Basic online stock and ETF trading should be free. Time. Investors now pay $0 commission at most online brokers, and some even offer free trading options, which can be invaluable for active traders. Even some of the best online brokers charge commissions for mutual fund trading and other services you may need, so it’s still important to compare fee structures.
  • Mutual funds: While most brokers charge a commission for mutual fund trading, it is also important to know that most have a list of hundreds or even thousands of funds traded without commission.
  • ETF Investing: The  best ETF  brokers  will not only have a $0 online commission for investing in ETFs, but they will also tend to offer access to a wide range of  branded and low-cost ETFs. These branded ETFs are managed by the broker-dealer’s own team of analysts and often include very low spending allotments.
  • Option Investing: A full-fledged stockbroking account will not only offer access to invest in stocks, ETFs, and mutual funds, but also options. Major options trading platforms tend to include a $0 commission for online options trading and high-quality trading software on online, desktop, and mobile devices.
  • Minimum account: Many of our favorite online brokers do not have a minimum account, but some do. If you are a novice investor, it is important to verify that you can meet the minimum investment requirements before choosing a broker.
  • Trading platforms: Some brokerage accounts have a full-featured and complex online stock trading platform and software available to frequent traders, as well as managed portfolio services from robo-advisors. Other stockbrokers are taking a simpler and user-friendly approach. And many have the best investment apps that can come in handy if you want to buy and sell stocks from anywhere in the world.
  • Research and Evaluator: The main reason to have an online brokerage account is that you can access second opinions when you need them. Many brokers offer a full suite of third-party research as well as stock and fund evaluators so you can find, for example, the annual cost of investing in a fund, or get help ranking your options through parameters such as the price-earnings ratio.

Fees for the best brokerage accounts

With so much competition among the best brokerage firms, consumers benefit in one of the most important areas for  successful long-term investments, commissions, and costs. Today, it is a table bet for brokerage accounts to offer commission-free online trading for stocks and ETFs. $ fees for mutual funds, cryptocurrencies, and fixed income investments are becoming more common. Here is an overview of the common fees for our selection of the best brokerage accounts.

  • TD Ameritrade: $0 Online Commission on Stocks, ETFs, and Options ($0.65 per contract)
  • Robinhood: $0 Online Commission on Stocks, ETFs, Options, and Cryptocurrencies
  • Webull: $0 Online Commission on Stocks, ETFs, Options, and Cryptocurrencies
  • SoFi Active Investing: $0 Online Commission on Stocks and ETFs
  • Loyalty: $0 online commission on stocks, ETFs, and options ($0.65 per contract)
  •  Interactive Brokers: $0 Online Commission on Stocks, ETFs, and Options ($0.25-$0.65 per contract)
  • E*Trade: $0 online commission on stocks, ETFs, and options ($0.65 per contract)
  • Merrill Edge: $0 Online Commission on Stocks, ETFs, and Options ($0.65 per contract)
  • Charles Schwab: $0 Online Commission on Stocks, ETFs, and Options ($0.65 per contract)
  • Vanguard: $0 online commission on stocks, ETFs, and options (up to $1.00 per contract)

The broker’s lowest commission will depend on the type of trade you make on your brokerage account. Robinhood and Webull are the lowest commission brokerage accounts on stocks, ETFs, options, and cryptocurrencies, they charge no commission.

But this option is not the best online stock trading option for active traders who focus on these commissions, as well as the quality of the trading software and margin levels. TD Ameritrade and Interactive Brokers combine powerful trading software with low commissions and competitive margin rates.

What is the best broker mobile app?

Since many people use their mobile devices for financial activities these days, it should be noted that most of our favorite online brokers are also the ones with  the best free investment apps. Some focus on  mobile, such as Robinhood, while others simply use mobile apps to offer their clients additional ways to trade stocks.

Unfortunately, there is no one-size-fits-all answer to where brokerage firms have the best mobile apps. Some people prefer easy-to-use apps that make it easy to buy and sell stocks, while others prefer feature-packed mobile apps for active traders and serious investors. But if you anticipate making enough trades through your mobile device, looking at each broker’s mobile app should be a big part of your evaluation process.

 

Top Brokerage Companies

Many of the top brokerage firms are well represented in our list of brokerage accounts to consider. Here is an overview of the top asset-based brokerage firms under management in 2021.

  1. Charles Schwab: $7.614 billion
  2. Loyalty: $4.228 billion
  3. Bank of America/Merrill Lynch: $3.693 miliar
  4. JP Morgan: $3.00 trillion
  5. Robinhood: $0.81 billion
  6. Ally Invest: $0.16 trillion

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