January 2013: Commissions Review

For this annual Broker Monitor Report, we provide commission rates for both self-directed and full-service accounts. In our review for self-directed accounts, we looked at commissions for basic stock and options trades, and no-load mutual fund orders. For fixed income commissions, we outlined rates for individual bond and CD products. All commissions reflect standard market orders.

Commissions for full-service firms are not as clear-cut, as firms generally charge commissions based on a client’s account value. To provide an even comparison, we looked at the standard commission rates for a set number of trades for a specific common stock. We also noted any trade or order fees. While commissions for advisory accounts are not an exact science, they provide a glimpse into what full-service firms are charging clients.
 
Over the course of 2012, there were few changes to overall standard commission rates charged by discount brokers. Nearly one-third of all brokers did not change their commission schedules. The largest change to a firm’s online commission was a reduction from $19.95 to $8.95. Two firms made changes to their phone and broker-assisted trade costs. One decreased them from $45 to $25, while the other now charges a flat $32, a $15 and $5 increase, respectively, for phone and broker-assisted trades.
 
Overall, commissions charged by advisors increased across the board at each of the six full-service brokers that we queried. The highest rates ranged from $198.51 to $974.41, and the lowest ranged from $100 to $657.73. As a percentage of change, the highest rate increases were between 11%-17% depending on the number of shares.
 
Additional Key Findings:

  • Since January 2012, the overall average of online stock trade commissions has decreased 13%
  • Only two firms charge different rates for options contracts based on trading frequency
  • Nearly one-third of all firms did not changed their commission schedules in 2012