Brokers

From Fidelity to Robinhood, Here Are Barron’s Best Online Brokers

Millions of first-time investors joined the ranks of more-experienced counterparts in self-directed trading last year. Online brokerages had to juggle two distinct customer bases, providing everything from the most basic primers to the most complex strategies and charts.

The top firms in Barron’s 27th annual survey of online brokerages appeal to all sorts of investors through technology that is both dazzling and easy to use, providing information and analysis that is comprehensive, convenient, and well-ordered.



Interactive Brokers Group

does just that, which is why it took first place for the fifth year in a row.

In one major way, this year’s survey differs from the past. For the first time, Barron’s included three financial-technology firms, or fintechs, in the rankings:



Robinhood

Markets, Webull Financial, and



SoFi Technologies
.

The apps from these companies are used by a large number of investors—especially younger ones.

Read on to see how brokerages stack up.

Interactive Brokers / 5 Stars



Interactive Brokers

goes from strength to strength, bolstering already superb platforms for both active and more occasional investors. While the firm is best known for its Trader Workstation, its 2½-year-old BKR Lite provides the buy-and-hold crowd an exceptional alternative.

The company has long been a leader in international trading and has more recently come to the fore in socially responsible investing tools. Over the past year, it released new apps that highlight each. Impact was launched in November, and IBKR GlobalTrader debuted earlier this month.

Impact goes beyond simply calculating environmental, social, and corporate governance, or ESG, scores, which a growing number of platforms now offer. It provides an opt-in, opt-out model, which allows users to include personal preference categories and exclude investments in companies whose values and products clash with users’. Customers can also swap positions from one to the other. Impact builds on the Impact Dashboard, launched a year ago.

GlobalTrader is aimed at streamlining the global equities investment process. It converts dollars or euros into local currencies and provides a tool called GlobalAnalyst, which scans for possible trades on various exchanges. Interactive also moved to broaden and strengthen its alternative offerings, notably cryptocurrency trading in September, following U.S. spot gold, launched in May.

Fidelity / 4½ Stars

Fidelity is a perennial leader for longer-term investors, and for good reason. It often pioneers services and tools designed to make investing easier, more intuitive, and more informed. Its risk analysis easily calibrates portfolio returns and risks, benchmarked against various indexes. It offers lots of educational products in various media designed for novice investors. Its Fidelity Spire app, designed for young adults, added trading capabilities last year, alongside data.

A new research platform launched in May demonstrates that Fidelity can get as highly technical as any brokerage. Fidelity Active Trader Pro may not win the respect of some of its peers, but it remains a strong and robust platform.

E*Trade / 4 Stars

E*Trade prides itself on ease of use. Nowhere is this more evident than in its mobile app, which rivals Interactive Brokers for best in class. This past year, E*Trade redesigned the mobile menu to streamline usage and make most-used features more accessible. It also fully redesigned its Android app, following an iOS redesign that launched in late 2019.

New services also illustrate this pragmatic approach. Two are worth noting: The brokerage now offers free debit card, checking, and bill pay for any individual retirement account holder who’s 59½ years or older. And the brokerage launched its Bond Resource Center to act as a one-stop-shop for those seeking fixed-income investments and advice.

Charles Schwab / 4 Stars

Over the years, Charles Schwab has steadily strengthened both its online site and its mobile app, emphasizing completeness and intuitiveness. This past year was no different, with its presentation of information having grown increasingly better thought-out. This month, Schwab launched what it claims to be the most extensive list of thematic investing portfolios in the industry—45 themes that range far beyond the usual portfolios. Enticing younger investors, Schwab introduced in December a “starter kit” that includes $101 worth of stocks, as well as video primers.

When fully integrated with acquired broker TD Ameritrade next year, Schwab has the potential to be a world-beater.

TD Ameritrade / 4 Stars

While TD Ameritrade slipped a bit in our rankings this year, it’s no reflection on what it offers investors. Its active trading platform, thinkorswim, remains top-of-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 customers.

Merrill Edge / 3½ Stars

In terms of easy-to-digest, thorough, and graphically pleasing information, Merrill Edge continues to lead the field and remains a solid bet for those focused on retirement or occasional trading. It continues to improve. Utilizing artificial intelligence, its Dynamic Insights feature offers personalized news and research content. Active trading is another story, however, and in that realm the brokerage lags.

tastyworks / 3½ Stars

The London online-trading provider



IG Group

paid $1 billion last year for tastytrade, whose active trading platform, tastyworks, is beloved by users for brilliant technology and a constant stream of unconventional, live broadcasts. To date, tastyworks has taken advantage of IG’s back-office prowess. How well tastytrade can parlay IG’s global reach will determine whether those outside the U.S. will get to enjoy tastyworks’ singular approach to investing.

Webull / 3 Stars

Webull proves that financial-technology companies, or fintechs, can produce a first-rate brokerage platform. Needless to say, Webull excels best in its mobile app, combining sleek design with first-rate functionality. But it also scored impressively high in trading capabilities. Webull fully embraces community participation and now logs more than a million comments a day, most of which it streams on the site. This sounds like democratization. The downside? The 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 any active trading functionalities, and the amount of information and research lags.

Robinhood / 2 Stars

Robinhood upended the self-directing investment universe with an app that simplifies trading to a few clicks and a swipe. In the process, it attracted millions of first-time investors. Over the past year, its information capabilities and guardrails have improved. It now offers customer service by telephone—what a concept!—and more tutorials on investment basics. However, it still has a way to go to compare with direct competitor Webull, let alone the more-established brokerages.



J.P. Morgan

Self-Directed Investing / 2 Stars

J.P. Morgan Self-Directed Investing is disappointing, given the resources available from its behemoth parent. The platform needs big improvements if it expects to attract customers other than those with Chase banking accounts who want to invest in straightforward individual retirement accounts or the occasional exchange-traded fund.

SoFi Invest / 2 Stars

SoFi Invest appears aimed at those SoFi customers who want to dabble in stock trading or cryptocurrency alongside their savings account or student loan. The app is orderly and clean but lacks depth. The placement of “popular investors” above “popular stocks” says it all.

Email: editors@barrons.com

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