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A Closer
Look at Broker Ratings... Page 2
continued
The different methodology
used by the surveyors explains some of the divergence, but clearly, no single broker
towers above the crowd.
However, if you match the brokers to different types of investors, some consensus begins
to emerge.
- Datek, which promises to waive its $10 commission if your market order
isn't executed within 60 seconds, is a clear favorite of frequent traders.
- Fidelity and DLJdirect lure buy-and-hold
investors with their professional research (Fidelity offers reports from Salomon Smith
Barney, DLJdirect taps the rich veins of parent Donald Lufkin Jenrette).
- While most brokers reserve IPOs for high-end customers, E*Trade(EGRP)
and Wit Capital (WITC) attract certain investors by pledging to make
initial public offerings available to rank-and-file customers.
Then there are brokers who court the opposite ends of the investor spectrum: the
experienced, tech-savvy trader and the novice investor.
- Brown & Co., with its no-frills site and dirt-cheap $5 trades,
takes only savvy investors who meet their requirements -- five years' investing
experience, $40,000 annual income, a net worth of $50,000 (not counting a residence), and
a minimum of $15,000 to open an account. Novices need not apply! They should jump instead
to sites like National Discount Brokers (NDB) or Schwab, which are designed to comfort and
please the beginning investor.
- NDB leads the beginner through detailed help screens (such as the
step-by-step instructions for entering a stock trade) and offers online lessons in
investing basics at its NDB University.
Schwab strives hard to please the novice, as well as the mainstream
investor, with a wide range of products, primers, tips, and tools. And if the newbie
investor is cyberphobic, she can cozy up to a real, live broker at Schwab's
brick-and-mortar offices.
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