Online Brokers

In the U.S. alone, more than 50% of the population has their savings in personal accounts such as IRAs. And IRAs are powered by none other than … stocks. Stocks go up, and they certainly go down, but riding the wave and investing smartly is where the real money is to be had. Now, we’ll all not going to be Warren Buffet out here, but that doesn’t mean you can’t retire intelligently.

Part of retiring intelligently is having a good broker, and nowadays, many are online. Brokers online are plentiful and that is great news for investors. Competition is fierce which has dropped the costs and upped the quality of service. The most common features to filter and consider are commissions, account minimums, account fees, your personal trading style, tech needs and promotions. On the commissions side a broker will generally offer a full menu of options for your investments. These can be anything from bonds to mutual funds, exchange-traded funds or individual stocks. For individual stocks it is common to pay $4 to $7 commission per trade. Option trades will run from $0.15 to $1.50, and with mutual funds it is common for brokers to charge a fee for their purchase.

There are several additional instruments such as bonds and ETFs which vary greatly. In line with commissions is paying attention to account minimums. It is possible nowadays to find brokers that don’t charge a minimum. Reputable firms such as Ally Invest, Merrill Edge and TD Ameritrade are among them. However, most will require a minimum initial investment in the range of $500. For mutual funds, this is common as well. Regarding account fees, you can’t avoid them, but you can minimize them. A transfer fee will be charged for example for closing an account or transferring to another one. And a real pain in the butt can be inactivity fees or extra charges for research or data.

Another useful item to consider is your trading style. You might be thinking, “what style, I don’t trade!” Well, if that’s the case, then that’s your trading style, hands-off. If you are a beginner, then you won’t need an advanced trading platform for example. You may need a bit more hand holding, and this could come in the form of videos or tutorials. In the beginning brokers charged for these, but they are now commonplace with nearly every platform. On the other hand, if you are a very active trader then seeking out a brokerage to support that frequency is vital. Analytical tools, research and data, this is highly sought-after information especially for those that are trading frequently.

And lastly, be sure to take advantage of promotions. There is nothing better out there than a good promotion and companies will bend over backwards to throw them out. Now, choosing a broker only on its promotional offer is not wise, but it could make a world of difference if you’re stuck in the middle and trying to decide between the two.