How to Find the Best Brokers for ETFs
A guide for choosing the best brokers for ETFs based on fees, reputation and services.
For investors looking to invest in ETFs, finding the right broker can make a significant difference in overall investing success. With so many options available, it can be overwhelming to choose the best broker for an investor’s various needs.
In this article, we provide a simple guide for finding the best brokers for ETFs.
What to Look for in an ETF Broker
The process for finding the best brokers for ETFs is like the process for finding the best ETFs, which includes consideration of an investor’s goals and strategies, as well as low fees.
The general steps to take in finding the best brokers for ETFs are:
- Consider investment goals and strategies
- Look for low fees
- Check the broker’s platform and tools
- Consider the broker’s customer service
- Read the reviews and compare brokers
Consider Investment Goals and Strategies
The first step in finding the best broker for ETFs is to determine one’s investment goals and strategy. Investors can ask themselves questions like, "What is my investment horizon?" "What is my risk tolerance?" and "What sectors or asset classes do I want to invest in?" Understanding an investor’s goals and strategy will help them narrow the list of brokers that meet their specific needs.
Look for Low Fees
One of the most important factors to consider when choosing a broker for ETFs is the fees they charge. ETFs are designed to be low-cost investments, so it's essential to find a broker that charges low commissions and offers a wide range of ETFs with low expense ratios. Look for brokers that offer commission-free trades on ETFs or charge a low commission per trade.
Check the Broker's Platform and Tools
Another crucial factor to consider is the broker's platform and tools. Look for a broker that offers a platform that is easy to navigate. Check if the broker provides research tools, such as an ETF screener, market news, analysis and data that can help to make informed investment decisions.
Consider the Broker's Customer Service
Customer service is essential when it comes to investing. Investors need a broker that provides excellent customer service and support, especially if they are new to investing in ETFs. Look for brokers that offer 24/7 customer support and multiple channels of communication, such as phone, email and live chat.
Read the Reviews and Compare Brokers
Before choosing a broker for ETFs, it's essential to read reviews and compare brokers. Look for reviews from reputable sources and compare brokers based on their fees, platform and tools, customer service and other factors. This can help an investor make an informed decision and choose the best broker for their investment needs. Try to avoid websites that receive compensation from partners that may be included in their reviews.
Best Online Brokers for ETFs: Fees, Reputation and Services
When looking for the best online brokers for ETFs, it's essential for investors to consider their investment goals and strategy, and compare brokers based on their reputation and services. Here we highlight the five largest online brokers that provide a user-friendly platform, research tools for investors and excellent customer service.
Here are some of the best online brokers for ETFs based on their fees, reputation and services:
- Vanguard: Vanguard is one of the largest investment management companies and offers a wide range of low-cost ETFs with no commission fees. Specifically, Vanguard charges $0 for trading Vanguard ETFs and non-Vanguard ETFs online. For accounts under $1 million in assets, there is a $25 broker-assisted fee for trades by phone and a $20 annual account service fee.
- Charles Schwab: Charles Schwab is a well-known broker that offers a vast selection of ETFs with low expense ratios and no commission fees. Specifically, Schwab charges $0 for trading Scwhab ETFs and non-Scwhab ETFs online. For accounts under $1 million in assets, there is a $25 broker-assisted fee for trades by phone. There is no account minimum or trade minimums at Schwab.
- Fidelity: Fidelity is another reputable broker that offers commission-free trades on ETFs with low expense ratios. Trading fees are $0 for all ETFs and there is no account servicing fee for low balances.
- TD Ameritrade: TD Ameritrade is a popular broker that offers a wide range of commission-free trades on ETFs with low expense ratios. Note that TD Ameritrade is in the process of merging with Charles Schwab in 2023.
- E-Trade: E-Trade is a well-known broker that offers a vast selection of commission-free trades on ETFs with low expense ratios. Like other online brokerages listed here, E-Trade offers $0 trading fees for ETFs. E-Trade is consistently mentioned as a top provider of robo advisory services.
Note: All the above online brokers offer robo advisory services, which is a type of automated digital advisor that provides financial advice based on investor inputs and mathematical rules or algorithms. Robo advisor fees vary, but they typically range from 0.05% to 0.25% of portfolio assets, which is $5 to $25 annually for every $10,000 invested.
Bottom Line
In conclusion, finding the best broker for ETFs requires careful consideration of an investor’s goals and strategy, fees, user-friendly platforms and tools, excellent customer service, and reading reviews and comparing brokers. By following these steps, ETF investors can find a broker that meets their specific needs and helps achieve their investment goals.
