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Good_Life 03-16-2012 11:16 PM

Online Broker Question
I've read several posts on the "best" online brokerage and would like to hear opinions based upon my situation and biases as I'm kind of conflicted right now.

I have been using Scottrade since I first started investing when I was 18. I've stuck with them for eleven years now and they have generally been great and I have been pretty happy, but there are two things that really annoy me....

1. They do not allow stock/etf dividend reinvestments. This means whenever I get a dividend I have cash sitting in my account that is not invested, and I have to wait a significant amount of time before it makes sense for me to reinvest the cash into my portfolio to justify paying the $7 trading fee.

2. The lack of dividend reinvestment has always annoyed me, but this next one has only done so more recently when I combined my wife's assets with mine at Scottrade. We now have four accounts with them, a taxable account, an old ira account that is a throwback from a 401k plan that I had with my first job out of College, and our two Roth IRA plans. Scottrade does not allow you to have an overall portfolio view so I have to look at each account separately and calculate the asset allocations and portfolio performance myself. I just started an excel spreadsheet that does this, but it is kind of clunky and annoying. I'd really like a seamless report that could calculate my performance and asset allocation (having the asset allocation definitions to be customizable would be absolutely ideal).

I've narrowed the field down to switching my assets to Wellstrade and/or Charles Schwab. Wellstrade looks good, although I do not believe they have dividend reinvestment, but with the 100 free trades that likely would not matter. However after looking at their online demo their portfolio view does not look that robust and is pretty basic. I'd likely still need to deal with my spreadsheets.

Charles Schwab has dividend reinvestment although their trading fees are $8/trade. I am definitely not a frequent trader though and the only time I do so is when I contribute to our Roth IRAs and/or infrequently rebalance my taxable account (every equity asset class is so correlated now it doesn't even seem like rebalancing is even necessary anymore). Looking at the Charles Schwab online demo it also has this great looking "Portfolio Evaluation" view that combines all your accounts, gives you reports on how they are allocated as well as long-term performance to benchmarks (not sure if you can load historical performance into it).

So my questions are is there anyone out there that uses that Charles Schwab "Portfolio Evaluation" and is it very useful? Am I just deluding myself into thinking that I can get away from using my excel spreadsheets (I've tried using Mint as well for tracking investments but thought it was too basic.) If the Charles Schwab tool is not all that it is cracked up to be Wellstrade might be my best bet, although to be honest that whole 100 free trades idea I am a little skeptical of. With banks these days trying to get as much fee income that they can get after the passage of Dodd-Frank I wonder how long such a great deal will last and whether I might just have to end up switching all my accounts again. Thank you for any advice on this...

LOL! 03-17-2012 02:50 AM

I use WellsTrade, Fidelity, Vanguard, and TDAmeritrade.

WellsTrade does do dividend reinvestment if you want. You have to fax them a form on that.

WellsTrade does allow an overall portfolio view of your accounts. It has a view that is even better than Fidelity in that regard. It also has an account aggregation thing called OneStop which uses Yodlee to be able to look at all your entered accounts from all your financial institutions and not just WellsFargo.

The 100 trades a year is per account. That's about 95 trades per account more than you will need to use. You need to meet the minimum account value and have a PMA package with free checking to get free trades.

And surprisingly, WellsTrade let's you purchase without commission Vanguard Signal share class Index funds as well as Admiral share class of Vanguard non-index funds.

Negatives: Minimum account value of $25,000 or $50,000 depending on which state you live in. Virtually, no interest on cash sweep account. Account closing fees if you decide to leave WT.

For those that can swing the account minimum, WT is the best deal going. They do not do any advertising about it which contrasts with all other brokers.

A good place for more research on WT is Bogleheads Investing Advice and Info

I am not sure what you mean by "portfolio evaluation". Many folks use the Morningstar Portfolio X-ray tool. Maybe that's something for you to look at?

brewer12345 03-17-2012 09:48 AM

I have used Schwab for many years and remain quite happy with them. They offer good service for fair prices (not quite the cheapest, but competitive) and have everything I want and more. They were very incompetitive with their bond trading platform, but are rapidly improving there. I have never used their analytical tools, as I would not trust them to be accurate. Spreadsheet all the way and that goes for any broker.

Gotadimple 03-17-2012 10:17 AM

Agree with Brewer that you are still going to want to use a spreadsheet, because there may be other measures other than your asset allocation you will want to trade.

I do use the Portfolio Analysis tool and subscribe to a free quarterly portfolio analysis. They are both very good, but not as robust as the free Morningstar Portfolio analysis. Morningstar looks at the content of all your funds and redistributes them out to sectors and style boxes.

Schwab does not. But for tracking your asset allocation, if you comfortably feel you can "match" one of their investor profiles, the quarterly portfolio analysis is a really good way to watch your asset allocation.

-- Rita

ziggy29 03-17-2012 12:29 PM


Originally Posted by brewer12345 (Post 1174091)
I have used Schwab for many years and remain quite happy with them. They offer good service for fair prices (not quite the cheapest, but competitive) and have everything I want and more.

Another vote for this one. If I were just now looking to establish new investment accounts *today*, I might or might not go with Schwab. But I've been a Schwab client since 1989 and have not been disappointed with the service, and the price has been reasonable enough that I see no reason to switch. They've never given me a reason to want to go elsewhere.

Also, as far as commissions go, Schwab recently rolled out some ETFs with competitive (not always the lowest) expense ratios that are zero-commission for Schwab customers. That could be significant for ETF investors.

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