2018 Broker Survey Results

April 3, 2018

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)?

You appreciate that your broker has a good selection of funds (50%), and you like buying funds NTF or no transaction fee. “I use Fidelity and Vanguard for their diverse, in-house and mostly NTF fund selections,” one investor reported.

4. Customer service: Can you get help when you need it?

Courteous customer service matters a lot (48%), and some of you also value having a local office in case you need to talk to someone in person.

“Vanguard is fabulous to deal with”, one investor said.

“Somehow, Fidelity has assembled a very relaxed, knowledgeable, patient, likable employees answering phone questions,” another investor said.

“Answers phone 24/7 about anything. Local representative available by phone or in person if needed,” a Schwab investor noted.

5. Sales pitch: Will your broker try to sell you additional services?

“When I became a ‘high worth investor,’ TD Ameritrade assigned a senior account counselor to me, and he pesters me. I don’t like that there is somebody looking into my portfolio,” one investor noted.

However, another TD Ameritrade investor said, “When TD suggested that I use them for advice, I told them that I wanted to manage my money myself and they did not get pushy to use them.”

Other investors were happy to have additional help. One Etrade user reported that the “assigned broker knows me from dealing with my account and has waived fees, cut red tape and done whatever possible to keep me happy… it has worked!”

6. Attention to detail. It’s the little things that matter.

“I like Fidelity,” one woman wrote, however: “When I email, I frequently get my broker’s assistant answering my questions. He or she always assumes I’m a man, and refers to me as ‘Sir’ or ‘Mr.’ when responding. You would think they would take the time to actually view my profile.”

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