Are you thinking about moving your accounts to a different broker?

We’ve been hearing from many investors who are thinking about making a change now that their Scottrade accounts have been moved to TD Ameritrade.

TD Ameritrade’s transaction fees are higher than many other brokers, and it’s also the only broker we’re aware of that requires investors to hold no-transaction-fee funds for 180 days to avoid a redemption fee. (Most other brokers have a 60 or 90 day holding periods). So it’s no wonder former Scottrade investors are shopping around.

If you’re a fund investor who is thinking about changing your broker, here are a few things to keep in mind:

1. Open your new brokerage accounts FIRST

Once you’ve chosen a new broker and established your new accounts, your new broker will reach out to your previous broker and transfer your assets.

2. Assets should be moved in-kind (so there won’t be tax consequences)

Your fund shares should be moved in-kind so you don’t have to sell them at one broker and then buy them again at another broker. Beside saving transaction costs, this method avoids triggering taxes.

Occasionally, though not often, you may find a particular fund or share class of a fund that is not accepted by your new broker. In that case you’ll have no choice but to sell the fund prior to transfer. Contact your new broker to ask if each of your funds is carried on their platform.

3. If the broker has a local office, consider opening accounts in person

Continue reading “Ready to Change Brokers? Four Things to Keep in Mind” »


Which broker do you use to trade funds? That’s the question we asked FundX members, and more than 500 fund investors responded.

The majority of FundX investors use Fidelity and Charles Schwab. A smaller percentage use TD Ameritrade, Etrade and Vanguard. Most FundX members have been using their particular brokerage firm to trade funds for many years and would recommend it.  

Other brokers mentioned included Firstrade, Merrill Edge and Wells Fargo. A handful of respondents use two or more brokers (usually either Schwab or Fidelity).  

Most of you (67%) are very satisfied with your broker overall. When we looked at the specific results for each broker, however, we discovered that you were very satisfied with Schwab (80%) and Fidelity (73%) and far less satisfied with TD Ameritrade (30%).

6 factors to consider when choosing a broker

Investors also told us what they liked (and didn’t like) about their brokers, which may be particularly useful if you are considering changing your broker.

1. Website: How is the online or mobile experience?

Most investors trade funds online these days, so they really appreciate a broker that has an easy-to-use website (58%).

It’s hard to judge a broker’s website until you’ve got an account there, so it may help to know that one FundX reader found that “TD Ameritrade’s online trading platform is not as user-friendly as Schwab’s.”

Another investor reported that “Schwab’s website design is not as user-friendly as Fidelity; however, the information is better.”

One respondent liked that Schwab makes it “easy to get annual fund data for Turbo Tax”, while a Fidelity investor noted that the broker has a “great mobile app.”

2. Fees: What are the trading costs?

All brokers charge some trading fees, including transaction fees and redemption fees, and most respondents (55%) were OK with these costs.

Vanguard and Etrade investors were particularly happy with their broker’s low fees. 

TD Ameritrade users, however, were unhappy with their broker’s 180-day redemption fee.

Investors also disliked that they typically had to pay transaction fees to buy Fidelity or Vanguard. In fact, a handful of investors told us that they’ve opened accounts at three or four firms and they “use whichever one is free.”

3. Fund selection: Are most funds available, and how many are no transaction fee (NTF)?

Continue reading “2018 Broker Survey Results” »


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