In Modest Money’s Scottrade review, we’ll investigate all the qualities that have made it one of the longest-lived web brokers. Short and sweet, Scottrade is about two-thirds the price of TD Ameritrade and E*Trade for the same level of data, customer service, and research. The trading platforms are not as advanced, especially for high-level traders. But for most people, Scottrade is well equipped for their purposes.
Scottrade predates the Internet, and it became one of the web’s first established brokers in 1996. That they existed before the web is one of the keys to the way they do business today. Users who want more of the personal touch can meet with Registered Investment Advisors at a branch office. These locations offer seminars and educational opportunities. There are more than 500 of these branch offices located all over the Eastern half of the US as well as along the west coast. Service is spottier in the Midwest, but phone and web service is available everywhere. And many people find it more than sufficient for their trading needs. Advising is always available by phone during business hours – a connection made to the closest branch to you.
The main draw for Scottrade is their web services, where they offer $7 stock trades and powerful investment tools. Scottrade is good for beginners, because their interface design never assumes the user understands financial and investment jargon. If you’re confused, you can click through to find helpful explanations of every investment parameter. If you already know this stuff, you can ignore the tutorials and move right along through an intuitive interface.
A Deeper Look
A lot of users like Scottrade’s inexpensive selection of mutual funds. But while it isn’t the most expensive online broker, they aren’t the cheapest either. There is still a lower-cost alternative that might be better for someone who doesn’t have as much in the bank. Instead of charging a flat fee, Betterment charges based on a percentage based on the type of account that is being traded. This percentage can be anywhere from 0.15% and 0.35%, which isn’t very much at all. If you prefer a flat rate, TradeKing offers some great rates. While their software and investment tools aren’t as comprehensive as Scottrade’s, they only charge $4.95 a trade.
For options trading, you only have to look at OptionsHouse, which is Scotttrade’s options tool designer. What’s more, the best platform is only available to ScottradeELITE users (customers with over $25,000 in their accounts). Nonetheless, ease of use, price, and selections make Scottrade a good choice for novice and developing investors.
A new user will have to make a $2,500 initial investment. After that, stocks and options trading is $7 per. Research, data, and trading platforms are free. The broker offers a promotion that I find quite helpful: paying off your transfer fees (up to $100, with a minimum of $10,000 transferred) if you jump ship from another online broker in favor of Scottrade.
Another thing I like about this company is that while the broker makes a lot of research opportunities available, they never recommend any specific trades. This is a policy they stick to, but those types of recommendations are available from the thousands of Scottrade users who frequent the Community Forum.
Scottrade offers a lot of other things as well. Free checks, free ATM withdrawals, strong mobile apps, thousands of no-transaction-fee mutual funds, diverse asset classes, and competitive rates all around make Scottrade a great choice for new and experienced investors. There are other companies with more sophisticated platforms, but this isn’t always what you want if you don’t have 20 years of trading under your belt. Betterment offers a lot of tools that are great for beginners as well. You can invest in stocks, bonds, mutual funds and ETF’s. And their fees are cheaper.
Users complain that the transfers on Scottrade tend to lag on occasion, as funds are not available for withdrawal or reinvestment for too long a time. I haven’t experienced this personally, but I’ve seen it enough in other reviews to mention it. People typically have good things to say about Scottrade’s efficiency and speed. Their increasingly powerful mobile options give you a lot of trading power in the palm of your hand. I have always found that Scottrade’s customer service to be responsive and helpful, so a good mobile app is essential for me. I find that I don’t even need to access my laptop or desktop if I don’t want to. But I usually do because it is still easier to use these platforms, as well as find out sophisticated information through Scottrade’s research tools.
Scottrade is one of my top brokerage picks for beginning to intermediate investors. That said, there are still plenty of experienced investors who find Scottrade’s platform, prices, and tools more than adequate for their trading needs. Lots of customers have stayed with Scottrade for decades, and they are out there writing reviews. As an online broker where you will learn the ropes, Scotttrade scores high in terms of value and usability. These factors, combined with great selection and more advanced tools, mean that Scottrade has everything I’ll need for years to come. It’s possible that one day you might need more sophisticated investment tools, but I think that 90% of the people who check out Scottrade will find that it has everything they will ever need.
Scottrade Reviewed by Modest Money on .