Top 5 Online Brokers Ranked For Every Investor Type

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Active investors are like quarterbacks. After huddling with the latest market data, they set out to execute their plays, but they must react quickly whenever reality blitzes them like 220-pound linebackers.

To improve their success rate and avoid sacks, they need their stockbrokers to give them accurate, fast service.

In this Best Online Brokers special report , investors can get the scouting data they need to find the brokers who will do the best job for them. To create the rankings, IBD conducted a major survey of investors and identified the best online brokers overall -- and the top performers in 12 critical categories.

The categories cover the broker characteristics that survey respondents rated as most important: Low Commissions & Fees, Options Trading Platform, Research Tools, ETF Choices, Portfolio Analysis & Reports, Investment Research, Educational Resources, Tax Preparation Tools, Trade Reliability, Equity Trading Tools, Customer Service and Mobile Platform/Trading. (For more on the survey methodology, click here .)

Think about what's No. 1 to you as a brokerage customer trying to invest successfully in the stock market . Make sure that key attribute is reflected in your broker's strengths, just like an option QB demands that his running back can handle a quick pitch.

So who are the top five brokers overall? USAA,Charles Schwab ( SCHW ), Thinkorswim (one ofTD Ameritrade 's ( AMTD ) platforms), Fidelity and TradeStation.

The rankings for Overall Customer Experience reflect the brokers' performance across the survey's 12 key categories. Yet the brokers' specific areas of strength varied.

There were firms, such as Scottrade, that just missed the cut in a number of categories. And within the top five lists for each of the 12 specific characteristics, other firms also shined besides the top five brokers overall.

Do you like to plunge into a company's fundamentals and read analyst notes? Then you should look at which brokers ranked well in the Investment Research category. TD Ameritrade andE-Trade ( ETFC ) made the top five in this area, along with Fidelity, Schwab and USAA.

Yet some investors have a different approach. Andrew Selby belongs to this camp. He's an investor who follows IBD's CAN SLIM stock investing strategy and blogs at Don't Talk About Your Stocks .

"I get all of my research from the newspaper and from MarketSmith," he said. MarketSmith is an IBD sister firm that provides stock charts and other data online.

So maybe trading stocks on the run is more important to you. If so, then check out which brokers earned praise in the Mobile Platforms/Trading category. A separate article in this section zeros in on this area .

Michael Lamothe, who runs ChartYourTrade.com, says mobile tools aren't the No. 1 feature he demands from a broker, but they are an important secondary consideration.

"I do a lot of my work on the go, and so having a strong mobile platform is important," Lamothe said. He added that he's "someone who trades part time and has a full-time career," so he appreciates speed.

Three other categories also get examined in further detail in three articles in this special report: Tax Preparation Tools, ETF Choices and Options Trading Platforms.

The Low Commissions & Fees category is self-explanatory, but do look at that list if you trade a lot and want to minimize the cost of each buy and sell, or if you like passive index funds and keeping costs low. Interactive Brokers, OptionsHouse, Vanguard and TradeKing fared well in this area, as did USAA.

Lamothe says the No. 1 thing he demands from a broker is low fees. He notes that active growth-stock investors often will make two or three buys to achieve a full position, followed by multiple sells when they scale out of a position.

"It's reasonable to expect to have a large number of transactions in a given year, especially if you're pyramiding into a position," he said.

That means fees can really add up if they're on the high side, wiping out some gains.

Trade Reliability and Customer Service are also straightforward categories. You can assume the online brokers that scored well in those areas, such as USAA, Schwab and Vanguard, generally haven't exasperated the survey respondents with trade glitches or difficult call-center staffers.

If you resolved to learn more about investing, pay attention to the Educational Resources category. OptionsXpress and TD Ameritrade are among the leaders in this area, according to IBD's survey.

Here is a complete rundown of all of IBD's Best Online Brokers lists:

Overall Customer Experience

USAA

Charles Schwab

Thinkorswim

Fidelity

TradeStation

Low Commissions & Fees

Interactive Brokers

OptionsHouse

Vanguard Brokerage

TradeKing

USAA

Options Trading Platform

Thinkorswim

OptionsXpress

OptionsHouse

TradeStation

Interactive Brokers

Research Tools

Charles Schwab

Fidelity

TD Ameritrade

Thinkorswim

OptionsXpress

ETF Choices

Thinkorswim

Interactive Brokers

Fidelity

Charles Schwab

TradeStation

Portfolio Analysis & Reports

USAA

Fidelity

Charles Schwab

Thinkorswim

TD Ameritrade

Investment Research

Fidelity

Charles Schwab

USAA

TD Ameritrade

E-Trade

Educational Resources

Thinkorswim

Charles Schwab

OptionsXpress

Fidelity

TD Ameritrade

Tax Preparation Tools

USAA

Vanguard

Fidelity

Charles Schwab

Thinkorswim

Trade Reliability

USAA Brokerage

TradeStation

Interactive Brokers

Vanguard Brokerage

Charles Schwab

Equity Trading Tools

TradeStation

Thinkorswim

Charles Schwab

Interactive Brokers

TD Ameritrade

Customer Service

USAA

Charles Schwab

Vanguard Brokerage

Fidelity

Thinkorswim

Mobile Platform/Trading

Thinkorswim

USAA

Interactive Brokers

Charles Schwab

E-Trade



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Personal Finance , Investing Ideas

Referenced Stocks: AMTD , ETFC , SCHW

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