Online brokers are enjoying explosive growth as investors beat a path to their virtual doors. In fact, 2020 was a record year: More than 10 million new brokerage accounts were opened, many by first-time investors, according to market research firm J.D. Power.
This year, many firms say they’re on track to surpass that. Over the first six months of 2021, Fidelity opened an average of 40,000 new accounts every trading day—“a company record,” says Scott Ignall, who heads Fidelity Investments’ brokerage business.
This moment has been building for some time. The seemingly unstoppable bull market, commission-free trades and the pandemic lockdown all helped to break down investing barriers, both financial and emotional. And the meme-stock frenzy enticed hordes of eager investors to open accounts to trade stocks and options in volatile names such as GameStop and AMC Entertainment Holdings.
The influx of new investors has put a spotlight on finding a good brokerage firm. In this year’s annual online broker survey, we review nine. Five are large brokers that offer something for almost every kind of investor: Charles Schwab, E*Trade, Fidelity, Merrill Edge and TD Ameritrade. (Schwab’s 2020 acquisition of TD Ameritrade has not resulted in changes to most of the services the firms offer, and it may not for at least another year.) The remaining four—Ally Invest, Firstrade, Interactive Brokers and J.P. Morgan Self-Directed Investing—are contenders in this area, but to some extent they target particular customers. We look at which types of investors may be best served by particular firms in “Find the Best Broker for You,” on page 26.
This story is from the October 2021 edition of Kiplinger's Personal Finance.
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This story is from the October 2021 edition of Kiplinger's Personal Finance.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
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