For this Broker Monitor Report, we looked at some of the basic products and services – basic “plain vanilla” investing accounts, cash management accounts and IRA accounts – offered by each firm we track, as well as the various service fees. We compared the fees customers are most likely to be aware of and are sensitive to. Additionally, the fees we looked at are for standard accounts and do not reflect discounts/waivers for special/premier/tiered programs. We investigated brokerage account fees charged by Broker Monitor firms for the following accounts:
- Cash Management Accounts
- Investment Accounts
- Retirement Accounts
- Traditional/Roth IRAs
We were pleased to find that leading brokerage firms offer few barriers in terms of funding and maintaining standard brokerage accounts. Four firms do not have stated minimum initial deposit requirements, minimum balances or annual fees for self-directed investment accounts. Beyond this, five firms do not have a minimum initial deposit requirement for new clients that open a brokerage or cash management account. The majority of discount firms (nearly 80%) do not have a minimum balance requirement once brokerage accounts are open and funded. As is customary, no full-service brokerage accounts include a pre-determined minimum initial deposit when clients invest with a broker. Four brokerage firms, however, state minimum account balance requirements for full-service accounts.
Around half of all discount firms do not require a minimum initial deposit, or have a balance requirement or annual fees, for IRAs. Five brokerages, however, have a minimum initial deposit requirement to fund a new Traditional or Roth IRA; the requirements range from $500 to $2,500. Unlike discount firms, all IRAs from full-service brokers incur an annual fee. All full-service
Broker Monitor firms charge an annual fee for a Traditional or Roth IRA, with annual fees ranging from $50 to $160.
With regards to cash management fees, we found that firms offering online bill pay services do not charge a fee for the service, with one exception, which charges clients $4.95 per month. The majority of firms in our entire coverage group (nearly 66%) do not charge a fee for firm-issued debit card withdrawals at ATMs. Currently, only two firms offer unlimited external ATM Fee rebates to clients regardless of account type or asset balance. Additionally, two firms charge for adding check writing features to a brokerage account.
Additional key findings include:
- Discount brokerage firms in our coverage group that allow incoming domestic and international wires do not charge a fee for the transfers.
- Only four firms charge a fee for paper document deliveries.
- The majority of full-service IRAs also do not have a minimum initial deposit (75% of firms) or minimum balance requirement (62%).