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?
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.
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.