Millions of new investors joined the ranks of their more experienced peers in self-trading last year. Online brokers have had to juggle two distinct customer bases, providing everything from the most basic primers to the most complex strategies and charts.
The best companies in Barrons The 27th Annual Online Broker Survey attracts all kinds of investors with dazzling yet easy-to-use technology, providing comprehensive, practical and well-ordered information and analysis.
Group of interactive brokers
does exactly that, which is why it took the top spot for the fifth year in a row.
In one major respect, this year’s survey differs from the past. For the first time, Barrons included three financial technology companies, or fintechs, in the ranking:
Markets, Webull Financial and
The applications of these companies are used by a large number of investors, especially younger ones.
Read on to see how the brokers compare.
Interactive brokers / 5 stars
is getting better and better, bolstering already superb platforms for active and more casual investors. While the company is best known for its Trader Workstation, its 2.5-year-old BKR Lite offers the buying crowd an outstanding alternative.
The company has long been a leader in international trade and has recently established itself in socially responsible investment tools. Over the past year, it has released new apps that showcase them. Impact launched in November and IBKR GlobalTrader debuted earlier this month.
The impact goes beyond the simple calculation of environmental, social and corporate governance, or ESG, scores that a growing number of platforms now offer. It provides an opt-in, opt-out model that allows users to include categories of personal preferences and exclude investments in companies whose values and products conflict with those of users. Clients can also swap positions from one to another. Impact builds on the Impact Dashboard, launched a year ago.
GlobalTrader aims to streamline the process of investing in global equities. It converts dollars or euros into local currencies and provides a tool called GlobalAnalyst, which analyzes possible transactions on various exchanges. Interactive also decided to expand and strengthen its alternative offerings, including cryptocurrency trading in September, following US spot gold, which launched in May.
Loyalty / 4½ stars
Fidelity is a perennial leader for long-term investors, and for good reason. It is often at the forefront of services and tools designed to make investing easier, more intuitive and more informed. Its risk analysis easily calibrates the returns and risks of the portfolio, compared to various indices. It offers many educational products in various media aimed at novice investors. Its Fidelity Spire app, designed for young adults, added trading capabilities last year, in addition to data.
A new research platform launched in May demonstrates that Fidelity can become as highly technical as any brokerage. Fidelity Active Trader Pro may not earn the respect of some of its peers, but it’s still a solid and robust platform.
E*Trade / 4 stars
E*Trade prides itself on its ease of use. Nowhere is this more evident than in its mobile app, which rivals Interactive Brokers for best in class. Last year, E*Trade redesigned the mobile menu to streamline use and make frequently used features more accessible. It has also completely revamped its Android app, following an iOS redesign launched in late 2019.
New services also illustrate this pragmatic approach. Two of note: The brokerage is now offering free debit card, check and bill payment for any Individual Retirement Account holder age 59½ or older. And the brokerage has launched its Bond Resource Center to act as a one-stop-shop for those looking for fixed income investment and advice.
Charles Schwab / 4 stars
Over the years, Charles Schwab has continued to strengthen both its online site and its mobile application, emphasizing completeness and intuitiveness. This past year has been no different, as the presentation of information has become increasingly thoughtful. This month, Schwab launched what it claims to be the most comprehensive list of thematic investment portfolios in the industry – 45 themes that go far beyond the usual portfolios. Attracting younger investors, Schwab introduced a “starter kit” in December that includes $101 worth of stock, along with video teasers.
Once fully integrated with acquired broker TD Ameritrade next year, Schwab has the potential to be a global leader.
TD Ameritrade / 4 stars
Although TD Ameritrade has slipped a bit in our rankings this year, that doesn’t reflect what it offers investors. Its active trading platform, thinkorswim, remains best-in-class, with new charting strategies and drawing tools added. A partial redesign also made the thinkorswim app more customizable. Schwab’s announced integration of thinkorswim into the merged brokerage bodes well for all clients.
Merrill Edge / 3½ stars
In terms of easy-to-digest, in-depth, and graphically pleasing information, Merrill Edge continues to dominate the field and remains a solid bet for those focused on retirement or casual trading. He continues to improve. Using artificial intelligence, its Dynamic Insights feature offers personalized news and research content. Active trading is another story, however, and in this area brokerage is lagging behind.
tasty works / 3½ stars
London’s e-commerce provider
paid $1 billion last year for tastytrade, whose active trading platform, tastyworks, is beloved by users for its brilliant technology and a steady stream of unconventional live shows. To date, tastyworks has leveraged IG’s back-office prowess. TastyTrade’s ability to leverage IG’s global reach will determine whether those outside of the United States will be able to take advantage of Tastyworks’ unique approach to investing.
Webull / 3 stars
Webull proves that financial technology companies, or fintechs, can produce a top-notch brokerage platform. Needless to say, Webull excels best in its mobile app, combining sleek design with top-notch functionality. But he also achieved impressive results in terms of negotiation skills. Webull fully embraces community involvement and now receives over a million comments a day, most of which are posted on the site. It looks like democratization. The wrong side? Message board comments can overwhelm other sources of information.
Ally Invest / 2½ stars
Ally Invest is slowly strengthening its investment platform. However, it remains very basic and inflexible, especially its mobile app. It still lacks active trading features, and the amount of information and research lags behind.
Robinhood / 2 stars
Robinhood has shaken up the world of self-directed investing with an app that makes trading simple with just a few clicks and a swipe. In the process, he attracted millions of new investors. Over the past year, its information capabilities and safeguards have improved. She now offers customer service by phone — what a concept! — and more tutorials on the basics of investing. However, it still has some way to go to compare itself to the direct competitor Webull, not to mention the more established brokers.
Self-directed investment / 2 stars
JP Morgan Self-Directed Investing is disappointing, given the resources available from its giant parent company. The platform needs big improvements if it hopes to attract customers other than those with Chase bank accounts who want to invest in simple individual retirement accounts or the occasional exchange-traded fund.
SoFi Invest / 2 stars
SoFi Invest seems aimed at SoFi customers who want to get into stock or cryptocurrency trading alongside their savings account or student loan. The app is tidy and clean but lacks depth. The placement of “popular investors” above “popular stocks” says it all.
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