In the past, there were a few well-known and popular stock brokerages that everyone used to trade stock. My parents have always mentioned Charles Schwab, Fidelity, and Merrill Lynch as the larger brokerages who most people turned to to trade stock. While those are still around and popular, there are many, many new ones in play who want a piece of the pie. Some have been around for a few years; some have just entered the game within the last year or two. With so many different stock brokerages available, it becomes very difficult in choosing the “best” one. I think that it truly comes down to what you prefer. Below I will list the brokerages I have experience with, and will lay out their “best” qualities that set them apart from the competition. Hopefully, I can help you with finding a stock brokerage account that will be best for you.
Perhaps the most popular brokerage that was made popular through trading via mobile devices with a simple platform. When Robinhood hit the scene, they instantly became popular with their “no commissions” on trades, which led to Charles Schwab announcing no commission in 2019, a few years after Robinhood hitting the scene. Sign up now and you’ll get a free stock (chance of Apple, Facebook, or Berkshire Hathaway).
I personally used TDAmeritrade when I first started out in the world of investing. My parents had about $1000 that they forgot even existed and when they handed it down to me, we agreed it would be a good stepping stone into the wonderful world of investing. It was not too much to where it would irresponsible on their end, but enough to where I could purchase a number of stocks with. The platform honestly reminded me of a complex Excel spreadsheet that made it a bit difficult to navigate initially. As a beginner, I found the mobile app much easier to use than the desktop version. Customer service was decent, not great, but not bad. It is being bought out by Charles Schwab though, an agreement they made earlier in the year.
This is my go-to stock brokerage account. My experience is that it has been around for a really long time and that it has yet to fail to meet my expectations. It has adapted well to the no commission trades, made popular by Robinhood, and has excellent customer service (something that the newer mobile app brokerages have had their fair share of complaints on). It has withstood the test of time, bought out TDAmeritrade, has structured their earnings in such a way they seem to be able to stay poised for the future. It has all the basic features you would expect and want from a stock trading platform and more. If you want to start out with Charles Schwab, click here as an introduction offer. Below you will see what you can get based on what you deposit.
I do not have a ton of experience with this brokerage company but the most standout capability here is the use of their “pies”. This is where you can preselect the percent breakdown of what stocks you would like to invest in. When you invest the money within the account, it will automatically split the money into the respective percentages and invest it within the companies for you. Every time I think of M1 finance, it usually is tied to the their pies. If you’re interested in trying out M1 Finance, check it out here.
This is another stock brokerage that I learned of by social media. I initially created an account for the “2 free stocks” when I deposit $100 in my account. The appeal was the off-chance that I would get the stock worth $1400, but I ended with two stocks below $10 each. Not going to complain, because a 20% ROI is great when there is no risk involved. Since then, I have sold the shares and moved my money back to Charles Schwab. From a platform standpoint, the information and complex graphs appeal to those who use it to benefit them in a more “real time” use over those who want to buy and hold. Use this link to get yourself started with 2 free stocks.
While not as popular as other brokerages, SoFi Invest offers commission free trading and one of the best sign up bonuses of all brokerages for small accounts. The app is pretty simple to use and offers both market and limit orders. After depositing $1,000 into a brokerage account, SoFi will give you $50 worth of stock of your choice (you must sign up with a referral link). Compare that with other brokerages, and you’ll soon find out that you can’t get much better of a sign up bonus for small accounts. Additionally, once you sign up, there’s a $25 bonus after investing a minimum of $10 into cryptocurrency. Right away, you’re looking at $75 (7.5% return) for free, without lifting a finger, no risk necessary.
All these stock brokerages equate to more competition which should benefit us as the users because they will continue to find ways to undercut the competition in hopes to draw more users, as with any other sub-sector. Each company will have their pros and cons, some more than others, but ultimately “to each their own”. Your preference of the platform, usability, simplicity, and other factors will play a huge role in helping you determine the “right” brokerage for you. Each brokerage company has their own breakdown of earnings, what makes them more money, but as long as the company can continue to adapt to a more virtual means of trading stock, the company should be able to stay relevant for a long time. As more brokerages introduce themselves or brokerages get bought out (or disappear), I will update this blog. But until next time…
We appreciate you letting us be a part of your Break Time.
Checking out, Kenny