April 2013: Account Fees

This Broker Monitor Report provides an update of brokerage account fees. We list current account fees, minimums and various common service fees for basic brokerage and retirement accounts.

Since our last Account Fees report, published a year ago, we noted an overall increase in the number of fees. This year we included six additional fees that are frequently assessed by brokerage firms, but that were not included in last year’s report. We also included the brokerage account minimum balance. The six new fees are: Incoming/Outgoing Int’l Wire Transfers, Voluntary Corporate Action, Returned ACH Payment, Returned Deposit, Expedited Delivery Requests and Research & Legal Fees.

Overall, there were 29 fee changes over the past year, with nearly 60% of those changes a result of an increase in fees or reduced waivers. (These changes do not include the several service fees that were added to this year’s report that were not covered in previous years.) The most fee increases made by a single firm was five. Another firm lowered a total of three fees, the most decreases among all firms. Five Broker Monitor firms did not make any changes to their fee.
Annual account or maintenance fees are still assessed by nearly 40% firms in our coverage group. However, all firms that charge an annual fee also offer waivers, allowing clients to avoid fees by maintaining a specific balance, enrolling in certain services (such as direct deposit or e-delivery), as well as waving fees for clients with specific managed or advisory accounts.
Non-sufficient funds or returned item fees, or both, are assessed by all Broker Monitor firms. On average, firms charge $22.28 for returned checks, $21.47 for returned ACH payments and $19.94 for returned deposits.

Only three firms charge a fee to close a brokerage account. Another firm does not charge a fee to close a brokerage account; however, the firm assesses a $25 annual fee for accounts with assets that have not been accessed in two years. Though the majority of brokers do not charge an account termination fee, 83% of all firms do charge a fee to complete a full brokerage or IRA account transfer out to another financial institution. Only three firms do not charge a fee to close or transfer an account out. Effectively, these are the only firms that allow clients to fully close a brokerage account or IRA without being hit with a fee. On average, Broker Monitor firms charge $70 to transfer out a full brokerage or IRA account out.