Barron's Best Online Brokers 2017

What you as a new investor can learn from the most prestigious best online brokerage firms ranking

I personally believe that it is important for a new investor to get acquainted with the most prestigious brokerage firm survey early on. Here's what you should know:

Barron's Best Online Broker Survey 2017: Ranking Factors and Brokers' Ratings

Broker Trading Experience & TechUsability MobileRanges of Offerings Research AmenitiesPortfolio Analysis & Reports Customer Service & EducationCosts Total Stars
Fidelity 4.74.6 4.94.3 4.94.9 4.82.5 35.6 4.5
Interactive Brokers 4.74.4 4.34.7 4.44.9 3.94.2 35.5 4.5
TD Ameritrade 4.74.7 4.94.2 4.84.9 4.81.1 34.1 4.5
Optionshouse 4.54.6 4.83.9 4.34.7 4.32.6 33.7 4
Charles Sahwab 4.24.4 4.54.1 4.84.4 4.92.2 33.5 4
Merriill Edge 3.74.2 4.83.0 4.84.7 4.62.4 32.2 4
TradeStation 4.74.6 4.94.3 4.94.9 4.82.5 31.8 4
E*Trade 4.24.5 4.73.3 4.74.0 4.61.1 31.1 4
Tradier 2.84.4 3.73.1 3.63.4 2.94.0 27.9 3.5
Lightspeed Trading 4.13.9 3.72.4 3.02.5 3.73.5 26.8 3.5
SogoTrade 2.92.8 2.63.0 3.02.2 3.52.3 22.3 3
eOption 2.82.8 3.71.9 2.22.1 2.34.0 21.8 3
Firstrade 2.02.9 3.51.9 2.82.9 3.42.2 21.6 3
Just2Trade 1.52.4 3.31.1 0.81.4 2.63.6 16.7 2
TradingBlock 2.42.7 0.03.4 2.71.7 2.70.7 16.3 2
Planner Securities 1.42.8 3.61.8 0.71.5 2.31.5 15.6 2

Barron's best online broker survey is the most prestigious annual ranking in investment industry in the U.S. It is an honor for a brokerage firm to be rated high by Barron's, which, of course, drives more attention to the firm and hence attracts more clients.

Although the survey is designed to rank brokers based on their investment requirements and the needs of high net worth investors, I can still say that a beginning investor can also gain valuable information from it.

Here is a quick summary of Barron's Best Online Brokers Survey 2017

  • Fidelity Investments, Interactive Brokers and TD Ameritrade received the highest four and a half star rating among all firms.
  • Five brokers that received 4 stars: Optionshouse (acquired by E*trade and will be assimilated this year), Charles Schwab, Merrill Edge and TradeStation.
  • Firms that decided not to participate this year: Scottrade (acquired by TD Ameritrade), Vanguard (as usual) and TradeKing (stepped away this year due to acquisitions by Ally Bank, officially changed its name to Ally Invest in May 2017).
  • The only broker that reported breaches in 2016 is Charles Schwab.
  • Two newcomers this year are Planner Securities and Tradier.
  • There are no brokers which received the highest 5.0 score in any ranking category this year (see the table below).
  • Five brokers ranked the best for long-term investing: TD Ameritrade, Fidelity, Charles Schwab, Merrill Edge, E*Trade.
  • Five brokers ranked the best for novices: TD Ameritrade (the Web platform), Fidelity, Merrill Edge, Charles Schwab and E*Trade.
  • Five firms ranked the best for investors education: Charles Schwab, Fidelity, TD Ameritrade, Merrill Edge and TradeStation.
  • Four firms ranked the best for in-person service: Merrill Edge, Charles Schwab, TD Ameritrade and TradeStation.

The table showing the broker's ratings is at the end of the article.

The best Barron's online brokers in 2017

I would like to point out that there is no need to accept Barron's opinion as a golden rule. A brokerage may be considered as 'one of the best in the category' by Barron's, yet it might not be suitable for your investment goals. However, when you know your goals and what is important for you as an investor, Barron's ranking factors can help define which company provides better services that would be most valuable to you.

Let me get straight to the point and take a closer look at this year's survey results.

16 brokerage companies participated in the survey in 2017. Barron's reviewed and gave a point score based on seven criteria. Brokers were stacked up by the overall point score and given a star rating. Ranking criteria include ranges of offerings, customer service and education, portfolio analysis and reports, trading experience and tech, usability, research amenities, and costs.

Also, brokerage firms were assigned by categories such as the best for long-term investing, the best for novices, the best for investor education and more. See the survey results table with all the ranking factors at the bottom of the page.

This year, Barron's gave special attention to the value brokerage firms provide to their clients, mobility, sophisticated trading tools and social media.

Top 3 investment companies compared by Barron's

Fidelity Investments, Interactive Brokers and TD Ameritrade are the only three brokers that received four and a half stars out of five, which is the highest star rating among all other brokerage companies. Like in 2016, Fidelity and Interactive brokers occupied the same positions. On the other hand, TD Ameritrade moved one position up to the top three compared to its position in 2016.

Barron's says that Fidelity wins because of its excellent mobile tools and assistance available whenever clients want it. As last year, investing tools and broker's trade execution are pointed out by Barron's as the strong features of the firm.

Interactive Brokers received top marks for its trading platform and sophisticated trading tools such as an artificial-intelligence-enabled assistant and the trader’s journal. However, the company targets high-volume active traders and requires a high minimum investment to open an account. For this reason, I would say Interactive Brokers is not a good fit for a new investor.

TD Ameritrade, with its great trading platforms and educational resources, is a great choice for those people who are just starting out with investing. In fact, TD Ameritrade was tops as an online broker for novices.

Receiving a high rank year after year, TD Ameritrade's trading tools and free platforms (the Web platform is offered for new investors, the downloadable desktop thinkorswim platform with the deep set of tools and TradeArchitect are designed for experienced traders, and the mobile app) are mentioned as the strongest features of the firm this year. Launched recently, TD Ameritrade's robo-advisor service gives the broker additional credits. Read more A brokerage firm for any investor

As I mentioned above, Barron's rankings can provide a lot of valuable information for you as a new investor when you know your investment objectives.

For instance, beginners-friendly trading tools, extensive educational resources and great customer support can be the most important factors for major beginning investors. Going further, if you don't have a lot of money to invest in the beginning, then a minimum opening deposit will determine the best firm among those companies that already fit your criteria. If you plan to trade mainly through the phone, a brokerage with highly-rated mobile trading tools can become the best option for you. Also, Barron's survey provides a list of companies that reported breaches in the previous year and even those firms which decided to omit the survey for different reasons.

How to start investing

You can also visit the original Barron's best online brokers article.

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