The Top 20 Online Brokers
The Online Trading Boom
In order of ranking, the contestants are...
#8 DLJ Direct #9 Morgan Stanley #10 Suretrade #11 Webstreet #12 E-Trade #13 TD Waterhouse #14 AB Watley
#15 National Discount Brokers #16 American Express #17 Muriel Siebert #18 Mydiscountbroker #19 Dreyfus #20 Scottrade
EASE OF USE Criteria: Is the site attractively designed and easy to get around? Does every section have clearly labeled tabs or other navigational aids to indicate what's available? Is the online help area comprehensive enough to answer most routine questions? Is a site map always at the ready? Are the trading areas logically laid out, including on-screen features like real-time quotes?
FIRST: FIDELITY. A streamlined screen design and the links topping each page make it easy to surf despite the wide array of features. Trading area includes a separate, generous-size window with stock quotes and charts.
SECOND: JB OXFORD. This functional website with pulldown menus allows for easy transitions from one page to another. Online help is always just one click away.
THIRD: SCHWAB. Navigation is a breeze. Quick links in some sections make for fast access to account and trading screens. Real-time quotes are available at the bottom of each page.
CUSTOMER SERVICE Criteria: We placed a minimum of five calls and sent at least five e-mails to customer service, checking average response times and answer quality. We also judged how easy it was to open an account by evaluating on-site demos, counting the number of ways to apply and tracking how long it took to begin trading.
FIRST: FIDELITY. Reps, consistently the most helpful of those we tested, picked up the phone in less than three minutes. E-mail queries were answered in less than a day. The account was up and running the day our payment was received.
SECOND: WEB STREET. Hold times averaged less than a minute. E-mail answers arrived in three hours or less. It took three days to begin trading.
THIRD: AMERITRADE. Hold times averaged about a minute. Staff usually responded to e-mail in less than 48 hours. Trading was activated in seven days.
SYSTEM RESPONSIVENESS Criteria: We noted how quickly pages loaded as we surfed. Points for automated phone and wireless trading, or branch networks. Feedback like real-time balance updates and execution confirmations a plus.
FIRST: MSDW Online. Pages loaded briskly; phone and after-hours trading; 450 branches
SECOND: ML Direct. A very responsive site; no phone or after-hours trading, but 800 branches
THIRD: DLJdirect. Good site performance; phone and after-hours trading; only one branch
PRODUCTS AND TOOLS Criteria: For products--all listed stocks, a broad range of mutual funds, options, IPOs, bonds and banking choices. For tools--stock and fund screens, portfolio trackers, free research and news.
FIRST: ML Direct. Good stock and fund screens plus lots of investment choices; free proprietary equity research is a huge plus.
SECOND: TD Waterhouse. Strong third-party research; many investments, most available online
THIRD: MSDW Online. Detailed financial information from third-party sources like Thomson and Zacks; full range of cash management options
COST Criteria: The price of a 100-share online limit order for a $50 stock got the most weight. Other factors: the price of trades placed through a broker or automated phone system, margin rates, extra fees.
FIRST: AMEX. Accounts over $25,000: Online buys free, sells cost $14.95. Over $100,000: All online trades are free. Phone trade: $19.95; broker: $44.95
SECOND: DATEK. Online trade: $9.99. Automated phone trading not available. Broker: $25
THIRD: SURETRADE. Online trade: $9.95; phone trade: $13.95; broker: $34.95