December 12, 2011
According to Time magazine, many investment companies began methodically slashing their brokerage fees in early 2010. Schwab lowered trading prices from 12.95 to 8.95; Fidelity lowered commissions to a flat fee of 7.95 per trade. The big investment firms finally acknowledged what everyday investors have been saying for decades: fees matter.
Choosing an investment company is as personal a choice as choosing a doctor. Sometimes, cheapest isn’t always best, but expensive doesn’t always equal quality, either. Look for additional factors, such as minimum account balances, administrative costs, trade minimums and fixed account interest and margin rates. Also, choose a company that connects you with a human being when you dial their customer service number as well as a company that has an easy-to-navigate website packed with useful information.
Investment analysts like Kiplinger and Gomez offer useful and objective ratings of individual brokerages based on a variety of factors, including fees. You may benefit from paying a slightly higher commission to work with an experienced broker. In many cases, your instincts about a brokerage firm are just as important as the ratings. Start with ratings and then peruse several company websites. Look for reasonable fees, and then go with your gut.
