Investors come in all shapes and sizes — from deep-pocketed Warren Buffett to novices with $1,000 or less in their accounts. But among the most serious and sharp players in the stock market are active investors.
To succeed, active stock traders must commit to learning how to earn meaningful profits in the stock market. That means using a systematic approach to stay on top of the market, often checking it daily or even hourly so as not to miss the best time to buy or sell. And it means a keen search for the best investment tools that can help them reach their financial goals. To serve this key client base, the best online stock brokers constantly prowl for technological advances they can adopt to make active traders' efforts faster, easier and safer.
So which are the best online brokers in the eyes of these savvy stock traders? To find out, as part of Investor's Business Daily's Best Online Brokers survey, we looked at how active investors rate their primary brokers. Of 2,762 investors who took part in the survey, more than 1,600 were active stock traders. An active trader is defined as an investor who has five or more trades in the past month. Each active trader rated their broker on the 14 broker attributes that investors told us were most important, including Low Commission & Fees, Research Tools and Equity Trading Tools. We computed a Customer Experience Index (CEI) score for each broker, using the active traders' evaluations. Based on the Customer Experience Index scores developed by IBD's longtime polling partner TechnoMetrica Market Intelligence, we developed the top brokers ranking for the active traders segment.
The three brokers scoring the highest are Fidelity Investments, Charles Schwab (SCHW) and Interactive Brokers (IBKR).
We spoke with Fidelity Investments, Charles Schwab, and Interactive Brokers to see what makes their offerings stand out from the pack.
Fidelity Brokerage Features
Boston-based Fidelity takes the top ranking among active stock traders. Fidelity garnered high marks for three important attributes: Website Security, Trade Reliability and Customer Service.
"Active traders are demanding clients, and for good reason," said Scott Ignall, head of Fidelity's retail brokerage business. "They need the best services and tools to stay on top of markets, their trades and their strategies. At Fidelity, we believe we provide one of the industry's best customer experiences for active traders, and in the last year, the number of active trader clients have increased 7%."
Fidelity's Active Trader Pro (ATP) platform accounts for a significant portion of the firm's daily trading volume. According to Scott, active traders frequently use ATP's Daily Dashboard. The dashboard gives clients a visual snapshot of their investments and key portfolio events, streaming Level II stock quotes, advanced charting with more than 60 technical indicators, Real Time Analytics that scans positions and much more. Essentially, ATP allows clients to have their own customized views of the market and their investments.
In fact, Fidelity takes special care of its active stock traders. Fidelity has a unique customer service team for clients trading more than 120 times in the past 12 months (an average of 10 trades per month). Its Active Trader Services (ATS) can help active traders with trading questions, execution of trades, options and market commentary. (Read more about Fidelity brokerage account features in our earlier Best Online Brokers coverage for 2019.)
Charles Schwab Customer Ratings
Charles Schwab was also among the top three brokers among active traders. Schwab was the top-ranked broker among all investors in the 2019 Best Online Brokers survey with a broad array of high scores.
Among active stock traders, Schwab also ranked high in Website Security, Trade Reliability and Customer Service categories. A key part of Schwab's customer service effort is its "Through Clients' Eyes" strategy. The approach focuses on providing investors with great service, personalized advice and high-quality trading tools, regardless of account value.
Importantly, Schwab shows an intense focus of measuring client satisfaction using its own Client Promotor Score (CPS). "We just hit record satisfaction (CPS) among our traders in April, indicating that our traders are more satisfied than ever," said Jeff Chiappetta, vice president of trading services client experience at Charles Schwab.
For active traders, Charles Schwab uses its "Four Ps" to maintain and attract new clients: Price, Platforms and Tools, People and Plan. Price refers to competitive commissions. Schwab offers $4.95 per trade commissions. Schwab's trading Platform is simple, yet powerful. Schwab's People includes trading specialists to provide education and help. Lastly, Schwab helps clients creating trading Plans to set them up for long-term stock market success.
Looking forward, Schwab will release an enhanced version of IdeaHub and expanded programming on Schwab Live Daily. The IdeaHub helps investors explore options trade ideas based on sentiment and strategy. Schwab Live Daily, meanwhile, offers timely ideas from trading specialists and other guests. (Learn how Schwab brokerage ratings by investors put it at the top overall in our 2019 Best Online Brokers research.)
Interactive Brokers Fees And Features
Interactive Brokers rounds out the top three brokerage firms among active stock traders. In this year's Best Online Brokers report, Interactive Brokers ranked No. 1 in the Low Commissions & Fees category. That attribute also got high marks from the brokers active traders.
According to Steve Sanders, executive vice president of marketing and product development at Interactive Brokers, "One of our most popular current features for active traders is our Integrated Investment Account, which lets clients earn, borrow, spend and invest worldwide from one account."
IB's advanced trading platform, known as Trader Workstation or TWS, was specifically designed with active traders and investors in mind. "This powerful platform is especially appealing to high-volume, global traders and people who require in-depth news, technical research and risk analysis tools," Sanders said.
New features in 2019 include PortfolioAnalyst and Portfolio Checkup. Both help investors quickly analyze their portfolios with a great deal of specificity.
PortfolioAnalyst provides summary values at a glance for each financial institution or consolidated views across all institutions and for different time periods, including current and prior balances, return percentages, and percent change in value. You can drill down to see positions and transactions by account or asset class.
Portfolio Checkup provides a single view of your account. It helps you measure the performance of all your accounts and understand your portfolio's exposure by geography, sector and asset class.
Meanwhile, IB's Traders' Academy offers courses for investors of all experience levels. For the more active stock traders, in particular, courses include Advanced Trading Tools, Trading Around the World and Introduction to Margin Trading. (Learn what led Interactive Brokers' customers to rank it among the top three Best Online Brokers for 2019.)
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