Sometimes, a little competition can be a good thing. With all of the online discount brokers available today, the pricing, customer service, trading tools and execution has to be top notch for a consumer to even consider signing up. Firstrade boasts that they have all of these things and then some, so let’s put them under the microscope and see if Firstrade can deliver.
Firstrade was established way back in 1985 in Flushing, NY, as a local discount broker. In 1997, business was booming, so Firstrade decided to launch an online version of their services becoming one of the first online discount brokers available. As you would expect, trading tools were limited but the early experience allowed them to progress faster than other online discount brokers in the space today. In 2004 and 2005, Firstrade was routinely reviewed by Kiplinger and SmartMoney Magazine as one of the best brokers available however over the last few years, it would be difficult to find the same accolades. What gives?
Firstrade Sign-Up Bonuses
Firstrade is currently running a triple bonus promotion, where users can receive 250 free trades, a $100 transfer rebate AND $250 in cash. In order to receive all (or even part) of this bonus, you must:
- Fund the account with at least $1,000 to receive the 250 free trades. Trades can be executed during the first 30 days, at which time the remaining free trades will expire.
- Transfer at least $25,000 to receive the $100 transfer credit. You must file a transfer rebate form before executing the transfer to make sure you receive the $100 credit.
- Fund the account with at least $100,000 to receive the $250 bonus. Account must remain open for nine months, or Firstrade reserves the right to remove the bonus.
- All promotions expired April 15th, 2011.
Firstrade Commission Structure
The number one priority of any online investor, especially if their a beginner or only make a few trades a year, is cost. Firstrade offers unlimited shares trading at $6.95, putting them a nickel below Scottrade and a few dollars above and below just about everyone else. Broker assisted trades are considerably more expensive at $26.95. For options, the price begins with the $6.95 flat rate then adds an extra $0.75 per contract, which is fairly standard in the industry.
Trading mutual funds is your best low cost solution with Firstrade, as they offer free trades on no transaction fee funds AND load funds. No-load funds will commission a fee of $9.95 and all trades on mutual funds have the same disclaimer from Firstrade:
A Short Term Redemption Fee of $19.95 will be applied to redemptions of mutual fund shares held less than 90 days. Broker-Assisted redemptions will incur a charge of $26.95. Transaction Minimums: Initial Investment – $500 / Additional Investments – $100. Redemptions of less than $500 will incur a $19.95 fee, unless the entire value of that fund is less than $500. For mutual funds transferred to Firstrade, the 90 day holding period will begin when the account transfer process is complete.
Firstrade Customer Service
Whenever you have a problem, it’s nice to know that there’s someone around to help. Firstrade offers three methods of providing customer service:
- Live Chat Customer Service – Tested this out myself when writing this review and I was very satisfied. The representative answered all of my questions about Firstrade and all information matched what I was able to find on their website. Live Chat support is available from 9amET to 6pmET Monday through Friday.
- Phone Customer Service – Firstrade offers extended business hours support via phone. Monday – Friday, agents are available from 8:30amET to 9:00pmET and again on Saturday from 10:00amET to 2:00pmET. 24-hour support would be nice but not entirely necessary considering the market is only open 35 hours a week.
- Email Customer Service – If you have a question for Firstrade, you can send them an email and expect a response within 24 hours, if received during a work day and within 48 hours, if received on a weekend.
Firstrade Trading Tools
Firstrade currently advertises a handful of online tools that can help beginner-to-advanced investors make decisions easier.
- X-Stream Suite: Allows access to free streaming stock charts with real-time technical analytics, streaming time and sale information, quick order entry, company profiles, and many other features.
- Streaming News: As it happens, Firstrade will scroll headlines and updates across your account.
- Investment Screeners: If you’re having trouble deciding which stock or mutual fund to buy, let a Firstrade investment screener help you out. Depending on your goals and available amount to invest, an investment screener can help clear up any questions you might have.
- Streaming Portfolio: Including in the Firstrade streaming repertoire is a streaming portfolio where gains and losses are updated as they happen. The refresh button on your browser won’t be needed any longer.
Now while all of these tools sound and look nice, they are offered by a lot of other online discount brokers. Firstrade knows this and has finally decided to beta test their new trading platform, FirstradeNext. FirstradeNext was scheduled to launch in Q4 of 2009, however the technology wasn’t quite right and it continues to be postponed. Unfortunately, I have yet to test drive this new software, as email invitations are sent out to account holders in batches and I have yet to receive mine. You can bet that when this new trading platform becomes available, I’ll have an extensive review of it’s capabilities.