One of the many struggles online investors face is finding the right online stock broker to work with. Each broker offers a variety of similar services, but key differences between fees, tiered service options, customer service, and more can make or break whether an online stock broker is right for you and your investment needs.
Some prefer an online stock broker that’s very involved and offers a wide variety of services and resources to their clients, while others prefer a hands-off, low-cost option as they get started investing. This article explores Scottrade as an online stock broker. We’ll cover the good and the bad, and what kind of investor will likely work well with Scottrade as their online stock broker.
Scottrade Review Summary:
✅ Multiple trading platforms
✅ No annual or inactivity fees
✗ High account minimum amount
✗ Unstable platform
Scottrade has a large network of branches and users, and their heavy brick-and-mortar presence is often viewed as a positive aspect to the way they do business. They’ve scored well on both NerdWallet and Stock Brokers – earning a 4/5 stars on each broker-grader source. However, Scottrade was recently bought by TD Ameritrade. The acquisition is scheduled to close in September of 2017, and as with any large-company, financial-institution acquisition, the transfer of accounts could mean new terms and trading costs that current Scottrade clients may not feel best represents their needs as investors. On the other hand, the acquisition could go smoothly and open up more options for Scottrade investors. The question is whether or not that kind of risk someone who is looking to open an account is willing to take.
All that being said, Scottrade doesn’t fair well on Consumer Affairs. Many users cite an unstable platform and a site that isn’t very user-friendly as the cause of their dissatisfaction. Unfortunately, while we always take negative reviews from individuals (as positive reviews are rarely reported as often), these complaints resonate. Having a system crash or “kick you out” in the middle of managing your portfolio or placing a trade is a legitimate problem, and the instability of their outdated website has been noted specifically by several reputable broker reviews.
Costs and Fees
Scottrade beats other companies, like TD Ameritrade, in their overall stock trading costs ($7/trade). Their options trades are $7/trade +$0.70/contract. They do have an account minimum of $2,500 for brokerage accounts and $0 for IRAs. This account minimum may be too high for investors who are looking to just get started, or don’t want to be held to a high account minimum.
Scottrade doesn’t have any annual or inactivity fees, and their full outgoing transfer fee is $75. Again, it’s important to note that because they’ve been acquired by TD Ameritrade many of their costs, fees, and terms may change in the very near future and investors should keep this in mind when setting up an account.
Scottrade has multiple trading platforms that work on web, desktop, and mobile devices. That being said, their available investments are fairly limited in comparison with other similar brokers. According to NerdWallet’s 2017 Review of Scottrade, “Scottrade’s lack of commission-free ETFs isn’t unusual for an online broker, but it’s worth pointing out because those are a popular vehicle for beginner investors and IRA investors.” Scottrade also falls short when it comes to Forex and futures trading – neither of which are currently an investment option for their clients.
Ease of Use
While Scottrade has all of the platform availability that similar brokers have from web, to desktop, to mobile, the complaints surrounding their outdated system are too many to ignore. Their customer service is generally good, according to several online reviews, specifically in the online chat and email arenas. However, their phone support isn’t 24/7. Their sites do look and act less up to date and user friendly as other brokers, such as TD Ameritrade or E*Trade.
Should you invest with Scottrade?
In short, maybe. While that’s not the most definite answer we could provide a potential investor, we feel there are better options out there for online stock brokerage. Between E*Trade and TD Ameritrade alone, you’re going to find a more efficient online platform with more options (even if the fees are somewhat higher than other online options).
Something to note, however, is that Scottrade has one aspect that no other online brokers have – hundreds of brick and mortar locations. For beginning investors, this means they can get the attentive broker-client relationship they’re looking and can start actively trading and monitoring their growing portfolio with someone there to help them every step of the way. For some, this feature alone would be worth putting up with the instability of Scottrade’s acquisition by TD Ameritrade, and their less than perfect investment selections. However, for most who are truly looking for an online stock broker, Scottrade isn’t the answer they’re looking for.