Doug writes in to ask:
I am a reader of your blog and am looking for a new stock broker to trade stocks with. What broker would you recommend?
I haven’t really covered investing on the blog, since in the past 2 years I’ve become very passive in my investing approach. When I don’t deal with it daily, it’s difficult to provide any kind of worthwhile commentary on it.
However, brokers are something I definitely have experience with. Over the last 10 years, I’ve had accounts at no less than all of the following brokers (some multiple times):
- E-Trade
- Ameritrade (now TD Ameritrade)
- Fidelity
- Sharebuilder
- Banc of America
- Charles Schwab
- Vanguard (my current broker)
Can you tell I like to shop around? My wife says I have financial ADD; perhaps she’s right, but I like to think of it as keeping my feelers out there and options open. There are a few other online “leaders” out there which I haven’t crossed paths with yet, and they include:
My Thoughts
If I were looking to switch brokers today, where I would go would depend on the kind of investor I was. Some examples follow:
Low Balances
For someone just starting out without a lot of money to invest, I would look at Sharebuilder as a way to build up decent diversification without many account or investment minimums.
Researcher/Broad Investor
If you like investing in a very broad set of vehicles, you need a broker that can handle almost anything and the research to back it up. E-Trade and Fidelity both had excellent research tools and broadly-oriented platforms when I used them.
Frequent Trader
Power users will want to see a lot of tools at their disposal and low commissions to keep their costs down. Taking those factors into account, I would look into E-Trade or TD Ameritrade and possibly some of the options I haven’t explored, like Scottrade and Tradeking.
Passive Investors
If you’re a buy-and-hold investor without a lot of trading activity, and/or you like to hold mutual funds or index funds almost exclusively, I would look for a broker that has very-low-fee funds available and no account fees. Vanguard and Charles Schwab are among the best at this.
Overall
If I had no other considerations and wasn’t sure what kind of broker I really needed right now, I would pick either Charles Schwab, Fidelity, or E-Trade. All three had good online services, good customer service, low trading fees, and a broad range of investments to pick from.
Your Suggestions
Readers, do you have any other suggestions for Doug? What broker(s) do you use today, and why? Have you been satisfied or dissatisfied with them? Please write in your input in the comments!
Disclaimer: Many of the links in this post may be affiliated.
Fiscal Fizzle 
Although I own stocks and mutual funds, I do not trade the stocks very often. I add to my mutual fund positions monthly. I personally Schwab because the service.
I’m a big fan of both Scottrade and Sharebuilder!
As a passive investor, I’m a huge fan of Vanguard and Schwab for their low fees and commission-free ETFs.
I know a lot of users of my site generally say good things about Scottrade, Optionshouse and Optionsxpress.
Sharebuilder has gotten a few negative reviews though recently.