Every once and a while, someone emails me to ask how I find a good stock broker for my retirement assets. What do I look at when I compare stock brokers? My answer, almost always, is “it depends.”
Ahhh I bet you hate that answer too. Well, unfortunately, it’s the truth. Who you decide to use as your stock broker will depend on what you want it for. If you want to invest primarily in mutual funds, I recommend you go with a mutual fund company. If you like Fidelity funds, then open a Fidelity account. If you like Vanguard funds, go to Vanguard Group for your retirement account. For mutual funds, going with the broker that runs them makes the most sense because you don’t have to pay a transaction fee to buy and sell shares. With a Vanguard account, you can buy or sell at will.
If you want to trade in stocks, it comes down to cost. I want a broker that has a good reputation and affordable fees. If I want to trade a lot of options, then I want one that gives me good prices on options trades. If I want to trade straight equities, I want one with cheap commissions on stock trades. After that, I want to look at the account minimums and any other fees, such as an account maintenance or inactivity fee. In all truthfulness, I never pay an account maintenance or inactivity fee. There are far too many brokers for you have to stand dealing with a broker that nickels and dimes you for those fees.
2 responses to “How To Find A Stock Broker”
Great post. My wife and I both retired last year(not by choice) so these little tips are great. I also found this other article that was really helpful. Just wanted to share in case anyone else also found it useful.
I think SOGOTRADE is pretty good. It only cost $3 to make a trade (unlimited shares). They have good online and phone support, quick execution and a good inventory of shares that you can short! Oh and you only need $500 to open your account. You also get 100 free trades when you open your account. Can’t beat that.