Full Disclosure Finance

By Andrew

In a recent post I reviewed a number of different online brokers while making a decision on which to open an account with. I came to the conclusion that I was going to open an account with Bank of America in order to keep all of my money in one central location and to take advantage of their low trading costs. If you recall I stated that when you have account balances of $25,000 or greater they waive the fees for online equity orders. I was under the impression that the $25,000 included the money that you have in the actual investment account. However, this is not true. The $25,000 must be in a checking, savings, or money market account. This is unacceptable for me because there is no way that I want to have $25K just ’sitting’ around in a savings account earning a lousy 0.2% interest. There are better things I can think of to do with that money. So knowing this I decided to go back to the drawing board and rethink my decision.

In the previous post I said that both Scottrade and TD Ameritrade ranked high on my list of online brokers. However, I do have some concerns about both sites. Scottrade has very low fees and great customer service, but the main complaint from current customers was that their stock research left something to be desired. As for TD Ameritrade all the online reviews stated that their research and trading tools were superb, but it seems that some are only available to their Apex customers. To qualify one has to average 5 trades per month or maintain an account balance of $100,000. Most average investors will not meet either of these criteria, which means they can’t take advantage of some of the more sophisticated features offered by TD Ameritrade.

In many of the online reviews a site called TradeKing was consistently near the top of the ratings. Everything I read about the site seemed to be very positive. They’ve only been around since 2005 and already they have become quite popular among the discount online brokers. Their fee structure is a flat $4.95 for online equity and options trades (plus a modest $0.65 per options contract), there are no account minimums, and no hidden fees. They have good research and trading tools which are available to all customers, not just the ones with the most money. They offer streaming quotes, options and stock screeners, an ETF center, and in-depth technical analysis. So after further review I decided to open account with TradeKing. Although I’m sure I would have been happy at either Scottrade or TD Ameritrade I chose TradeKing because they have low fees and seem to be a no nonsense outfit when it comes to providing their customers with quality research and a smooth trading interface with good features.

I am currently awaiting an funds transfer between my checking account and my TradeKing account. I will be keep you updated with an purchases that I make and how I like the TradeKing platform. Stay tuned for more updates coming soon.

Here is a great link to Consumer Search that provides links to a number of reviews of online brokers including Barron’s, JD Power & Associates, and Kiplinger’s.