Scottrade Review – Online Discount Broker

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Review of: Scottrade

Reviewed by:
Rating:
4.5
On January 10, 2011
Last modified:September 19, 2013

Summary:

I've used Scottrade for years, due to its low cost, great customer service, and ease of use.

Scottrade has the reputation of being one of the best online discount brokers in the space today.  The purple and white continue to win JD Power and Associates awards for highest investor satisfaction and when compared against other online discount brokers, Scottrade seems to hold up pretty well.

Scottrade’s Commission Structure

Pricing is always an important factor when choosing and online broker and Scottrade currently offers a flat fee of $7 per online trade.  Regardless of the volume of trades you make with Scottrade, the $7 cost always remains the same.  However, if you need help in placing your trade, the cost can rise.  Telephone trades can run you $17 and broker assisted trades cost $27, making Scottrade a somewhat pricey option if you need expert assistance.  For options commissions, Scottrade charges $1.25 per contract, and if you are looking for options exercises and assignments, expect to pay $17.

Scottrade’s Trade Execution

The price of trades seems to get a lot of attention when it comes to discount stock brokers. While this makes some sense on the surface, one needs to avoid being penny wise and pound foolish. While the cost of stock, option and other trades is certainly important, poor trade execution can easily wipe out any cost savings from using some low cost brokers. So what’s trade execution?

Scottrade Trade Execution Process

Scottrade Trade Execution Process

Trade execution is the process of bringing together a buyer who wants to buy a stock with a seller who wants to sell the stock. Remember that while the market is open, actively traded securities are continuously changing in price as buy and sell orders are executed. Because of this, the speed and price of trade execution can have a major influence on the price you pay when you buy a stock or receive when you sell. And Scottrade excels at both.

Scottrade’s execution price beats industry averages when it comes to the percentage of orders that are executed at or within the National Best Bid and Offer (NBBO). The NBBO is an SEC requirement that brokers must guarantee customers the best available ask price when they buy securities and the best available bid price when they sell securities. Scottrade consistently beats the industry average for trades that meet or exceed the NBBO. And Scottrade goes one step further, and seeks to even do better than the price you are expecting, and succeeds more than half the time.

Scottrade’s Customer Service

Customer service is another important consideration when choosing an online discount broker, particularly if you are new to investing or online trading. In speaking with family and friends that use Scottrade, they all agree that it’s the best of the best. Rarely do you have to wait longer than 30 seconds on hold to speak with a representative. And if you’re experience is anything less than perfect, expect to receive a follow-up call or email from Scottrade the next day looking to make things right.

Probably the best thing Scottrade has going for itself is that it’s a no fee broker.  A lot of the online discount brokers out there like to charge you for simply maintaining your brokerage account. Scottrade, on the other hand, does not charge a fee for the following notable services:

  • Having an inactive account
  • Monthly or annual account maintenance
  • Real-Time streaming quotes
  • Transferring money out or closing your account
  • Terminating your IRA

Another real positive that Scottrade has going for itself is the ability to visit a brick and mortar location.  For those not as comfortable with trading stocks online, Scottrade currently has 436 branches nationwide that can conduct all of the services they have available online.

Scottrade’s No-Fee IRA Accounts

For me, this is one of the big reasons I’ll be opening a Scottrade account later this year. Scottrade offers no-fee IRA accounts, including a traditional IRA, Roth IRA, Rollover IRA, and SEP IRA. Scottrade’s retirement accounts have no opening, closing, annual or custodian fees, and there is no minimum annual contribution requirement.

Scottrade Videos

This first video shows how to place a stock trade through Scottrade’s online platform:

This recent video introduces the Scottrade community that all account holders have access to. It’s a great way to interact with and learn from other Scottrade investors:

Finally, this video provides some insight into the current stock market and what we might expect going forward:

Overall, Scottrade grades pretty well when taking everything into consideration. With their main downfall to be pricing, they certainly make up for it with other amenities. You can visit Scottrade for more details and to open an account by clicking here.

Published or Updated: September 19, 2013
About Rob Berger

Rob founded the Dough Roller in 2007. A litigation attorney in the securities industry, he lives in Northern Virginia with his wife, their two teenagers, and the family mascot, a shih tzu named Sophie.

Comments

  1. Tim Reppucci says:

    Just a comment to reassure ANYONE doing business with Scottrade to confirm their professionalism,friendliness, customer concern! They are strongly reccommended1

  2. DR says:

    Tim, having recently opened a Scottrade account, and can confirm the same. The process was simple and the people are great. My first online trade went smoothly, too!

  3. DJ says:

    These folks are GREAT ! They were very patient when i as a novice were making a few mistakes . Anyone new to investing should seriously consider SCOTTRADE before any other broker.. !!!

  4. David says:

    I’ve been using Scottrade “Elite” and other brokerages for a few years now. I trade almost daily with Scottrade. One of the nice things about Scottrade is their “Gainskeeper” accounting program which is good when tax time rolls around. I have to do estimated taxes 4 times a year and this makes it easy, well easier. Fast executions, very dependable, level two works when others are having problems. Some things I’d change with the software and charts but all in all I’ve been statisfied and will continue to use Scottrade.

  5. Simeon says:

    I hope you don’t have the troubles with Scottrade that I have had. Their customer service is pretty bad. Rude people that are of no help. They can’t do this and they can’t do that and they lost the other thing.

    I’ve been a customer of Scottrade for a few years now. They make several thousand dollars a year off of me. But whenever I have to deal with an actual person, it’s a nightmare!

  6. Tyler says:

    I’ve been with them for about 9 months now. Out of all of the sites that I have tried, Scottrade seems to be the best for newbies. I’m still trying out Zecco though so it might change.

  7. BE says:

    A CREDIT CHECK IS REQUIRED TO OPEN IRA?
    I attempted to open a traditional IRA at a Scottrade office today and was rejected because of something that CSC Credit (a Equifax company) reported. When did the Feds legislate that a credit check must be performed to open an IRA, and what is the correlation? Apparently, CSC reported a low FICO score or an address discrepancy. I have used the same address for many years, and it is a valid mailing address. Therefore, the issue must be the credit score.

  8. jim says:

    I’ve used Scottrade for a few years. Their customer service is great. I can call up the local office or go in and talk to them in person. I’ve never had any problems and the service has been fabulous. On the one negative side I think their website is not as elegant as it ought to be… its slightly clunky interface in my opinion. Not horrible exactly but not up to what I’d expect.

  9. Dave says:

    I have been with Scottrade for over 10 years without “any” troubles at all. I loke their platform and their customer service. I can go to their local branch if I need to. So far I haven’t had to got to the local branch.

    Dave

  10. Tyler says:

    I’ve had no problem with scottrade so far. I noticed that they can be a little slow on stock that is not normally traded often.

    Scottrade normally has a lot of offers, so open an account when the time is right.

  11. trailor says:

    Scottrade is great unless you have to actually deal with someone. It is weird, because I feel like outside the web interactions, they run it like its 1970. When I have visited their offices (in two states) they act kind of rude and like I am a waste of their time. They also tend to lose stuff I submit in person. I am no high roller, so I suppose they save their smiles for those people.

  12. Dan says:

    Have been using Scott trade for a over a year now, platform seems to have everything that is necessary for a good trading experience. After first opening the account I received a call from costumer service, they were friendly and helpful and offered to schedule an appointment to visit a nearby branch to discuss how to properly use website/platform.