Table of Contents
Section 1: Web Site Functionality Rank
Scottrade's site is very easy to navigate. This is an ideal place for beginning online investors to start, there is very little clutter. Scottrade would be considered basic or stripped down by more sophisticated investors but the design makes navigation simple and intuitive. New browsers can learn the layout and content of the site very quickly.
We were also impressed with Scottrade's look and feel. They cater to new online investors, the entire site has the same general appearance and layout regardless of each page's function. Links and tabs are also very well labeled, every page actually contains what is promised rather than sending you to hub pages or pages that are cluttered with unrelated information.
Scottrade offers three different trading platforms and each provides a different customization experience. The rationale is to offer several different platforms so that they can meet the needs of different experience levels and trading sophistication and they've done a great job.
The beginner platform, Scottrade.com, doesn't offer much in the way of customization, but it is simple and easy to use. The intermediate platform, Scottrader, gives you a few powerful research tools and customization options, and is ideal for long-term strategies. The active trading platform, ScottradeElite, offers full customization, all the research and analysis tools available, and launches right from the desk top. We'll provide more details about each platform below.
Overall, Scottrade provides a great customization experience, we like the sites that don't try to push a one-size-fits-all platform on everyone.
Scottrade has a slower average execution time than many of their competitors but they are exceedingly good at executing trades at or within the National Best Bid Offer (NBBO). Over 95% of their trades execute at the bid you were expecting or better.
Section 2: Trading costs and Fees Rank
Intuitive Commission Structure?
Yes, very simple structure and competitive prices. Overall, Scottrade is an outstanding value for Stock, Fund and Option traders. Scottrade is one of the top three in the expense category.
Minimum to Open an Account
$500 minimum to open a new account
Internet Trades = $7.00
Interactive Voice System = $17.00
Broker Assisted = $27.00
Internet Trades = $7.00 + $1.25 per Contract
Interactive Voice System = $17.00 + $1.25 per Contract
Broker Assisted = $27.00 + $1.25 per Contract
Options Exercise & Assignment: $17.00
No-Load No-Fee Funds = $0.00 Free trades, No commissions or transaction fees charged by the Mutual Fund or Ameritrade. (1,224 available)
No-Load Funds = $17.00 transaction fee charged by Scottrade. This is the best value in the industry. (3,312 available)
Load and Fee Funds = Fees charged by mutual fund and possibly by Scottrade as well.
Tip: Avoid any funds with loads or fees. With the vast selection of no-load no-fee funds offered by many of today's online brokerages, there's no reason to ever pay them!
Treasuries & Bonds
Treasuries, Bonds & CDs = On a net yield basis. Scottrade acts as the Principal for these transactions. When acting as principal, they will add a markup to any purchase, and subtract a markdown from every sale. This markup or markdown will be included in the price quoted to you.
Rates & Fees
Margin Rate: Tiered rates. They go as high as 8.75% for $0-$10,000 accounts to as low as 6.25% for accounts > $1,000,000. These margin rates are high by industry standards.
Interest Paid on Cash (Sweep): Based on portfolio size with the highest, $1,000,000+, paying an APY of 2.25% APR and the lowest, $0-$5,000, paying 0.10%.
Checking Available? Yes
Paper Statements: $2 monthly and $5 for reorders.
Electronic Statements: Free.
Paper Statements: $2 per month.
Wires: $20 for domestic and $40 for International.
Section 3: Customer Service Rank
Scottrade wins customer service awards year after year. They state that customer service is the foundation of their business model and it shows. You can count on well-trained reps, short wait times, and very few sales pitches. Every rep we talked to was friendly and helpful, Scottrade appears to still be the industry leader as far as basic phone support is concerned.
Online support is pretty strong and they were about to roll out live chat when we spoke to them. They also have great FAQs pages, tutorials and help tools. However, if you have a question we still recommend you pick up the phone. Wait times are short and reps are knowledgeable so phone support is the fastest way to resolve most questions or issues.
Advanced Support (Options, Funds, Bonds, etc.)
Scottrade doesn't offer managed accounts and has no specialists or advisors on staff, but every one of the regular reps we talked to at the national call center was a registered broker. You may still have to seek third party advice for advanced trading guidance and questions but Scottrade provides exceptionally well trained regular phone reps.
Section 4: Research Tools & Investing Information Rank
This is not an area where Scottrade excels. They do have a few nice tools and services but nothing compared to category leaders such as Fidelity or TD Ameritrade. They seem to have decided that their users will have to fend for themselves in this category. We were surprised that a company as service-oriented as Scottrade hasn't hired outside help. This worked great for TD Ameritrade, the tools they brought in-house from Morningstar.com are the best in the industry. If they hire some of the industry's top guns, Scottrade may soon be at the top of the rankings... until then, their research and analysis tools are below industry standards.
Level II Quotes & Streaming Data
Both are available. Level II quotes are free to ScottradeElite customers.
Scottrade offers three trading platforms designed to meet various customer profiles. Kudos to Scottrade for creating user specific platforms rather than pushing a one-size-fits-all platform on every client.
Scottrade: Beginners can choose the Scottrade platform to get accustomed to internet trading. This is a great place to learn the basics. Beginners that master this platform will be familiar with the basic features common to all online brokerage sites. This platform is free to new clients.
Scottrader: This platform is ideal for advanced traders that don't trade a lot. Experienced Index Investors, Income Investors, Value Investors, Mutual Fund Investors, and even most Growth Investors will appreciate this platform. It's fully customizable and grants access to nearly all of the research and analysis tools available at Scottrade. The only features exclusive to ScottradeElite relate to short term trading and technical analysis so most long-term investors won't even miss them. This platform is free to new clients.
ScottradeELITE: This platform is designed for the active daytrader that loves customization options, plus, ScottradeELITE launches right from your desktop. This tool offers every perk and feature available at Scottrade and the screen is fully customizable. ScottradeELITE is the only platform that offers Level II quotes. This platform requires that you have a $25,000+ account balance.
Stock & Fund Screeners
Scottrade's stock and fund screeners are inadequate for making investment decisions. The screening criteria is not as robust as competitors, so it's hard to narrow down a small list of promising investments. Scottrade competes on price rather than research and analysis so this was no great surprise.
Section 5: Perks Rank
ScottradeELITE: Scottrade's active trader platform is impressive, it offers intuitive design with a lot of power and flexibility. You can add just about any Scottrade tool or feature to your ELITE desktop, ScottradeELITE is fully customizable. This trading platform is not an industry leader yet, but it's certainly competitive.
Section 6: Product Offerings
IRAs, Roth IRAs and personal 401Ks
Guardianship, Conservatorship, Custodial, and Coverdell ESA Accounts
Trust Account, Estate, Partnership, Investment Club, Sole Proprietorship, Corporate Accounts, Limited Liability Company, Stock Broker-Assisted Account, 401K Plans/Defined Benefit/Money Purchase/Keogh DVP
Section 7: Security
Yes. SIPC protects securities in your account up to $500,000. Scottrade also carries insurance over and above the SIPC protection.
Firewall Secured and Fraud Protection
Yes. All of the major sites have dependable security. They can't afford to make mistakes, they wouldn't survive a year if they gained a reputation for mishandling money or for lax security.