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You've seen the ads: The office boy who
helps his boss make an online trade, the bartender who's a corporate raider, the tow truck
driver who owns an island in the South Pacific. Now you're ready to throw your mouse into
the ring with six million other investors and open your first online brokerage account.
What you're looking for -- besides low commissions and free research -- is a broker who is
always there for you, who never loses an order, never gives a busy signal, never puts you
on hold, and never ever has a systems crash.
So when you stumble across a broker who boasts it was rated number one by a well-known
magazine, you click happily right on over to the online account application.
Hold that click.
A top-rated broker may sound like the answer to your online prayers, but that little
encomium comes with more interpretations than Roshomon, and none of them means failsafe.
Depending on who's doing the interpreting, a broker can be rated number one in cost,
research tools, customer service, ease of use, reliability, speed of execution, or a dozen
other factors. It can be named best broker for frequent traders or long-term investors,
best for the expert or best for the novice. It can even win the coveted No. 1 overall
title. But none of this means that a top-rated broker doesn't suffer slowdowns or
interruptions in service.
The perfect broker simply doesn't exist.
Nevertheless, we all keep looking. Every few months, a new survey appears with new ratings
and new winners and new pronouncements about who has climbed and who has slipped in the
polls, and a whole bevy of No. 1 brokers is crowned.
The most recent surveys
have come from SmartMoney.com, Barron's, Gomez Advisors and Money.com. The usual suspects
rise to the top in these ratings, but no consensus has emerged for an overall superbroker
-- no hands-down winner who aces the number one rating in all categories on all surveys.
In fact, there is a wide divergence of opinion about the highest-rated brokers.
- Charles Schwab (SCH), who won top honors at Money.com, is ranked 3rd by
Gomez, but sinks to 9th place on Barron's survey and all the way to 12th at
SmartMoney.com.
- Quick & Reilly, a subsidiary of Fleet Financial (FLT,) took the
number one spot at SmartMoney.com but came in 8th, 9th, and 12th on the other surveys.
- Only three brokers appeared in the top five of all four surveys: Discover
Brokerage, National Discount Brokers (NDB), and DLJdirect
(DIR), which was named No. 1 by Barron's.
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