Thursday, May 22, 2008

SmartMoney's annual broker survey - E*Trade comes out on top

On the heels of Barron's online broker rankings comes SmartMoney's annual broker survey. It makes an interesting general observation:

Each year we take an in-depth look at the industry's performance, and it wasn't long before we noticed something new: a blurring of the lines between key players. For years online brokers could be divided into two camps — discount brokers known for cheap trades but not much else, and "premium" discount brokers with higher prices but more products and services. Now that's pretty much out the window. Scottrade may be a discount broker, but it's also opening new branches at a furious pace, giving it more outposts than Charles Schwab. And some traditional "premium" discount brokers now rival discounters when it comes to price: The average commission charged by discounters like Firstrade is about 15 percent less than that of premium players like Fidelity, down from nearly 50 percent just four years ago. "We're all in this arms race," says TradeKing CEO Don Montanaro.
The rankings are done from the perspective of a customer that trades 20 times a year and has $50,000 in an account, which can be the mass affluent segment. E*Trade comes out on top (page 4 of the online article) overall for the second straight year. TradeKing, which was first in Barron's online broker rankings, placed third overall in the SmartMoney rankings.