February 2017 – Online Fixed Income Trading

Fixed income products frequently play an important role in a balanced and healthy portfolio, providing investors with a reliable stream of income over an extended period of time. Though these products may not be as popularly traded as other asset classes, many leading brokerage firms allow clients to search for and trade such investments online. For this month’s e-Monitor Report, we examine the fixed income trading capabilities in our coverage group. In addition to reviewing the kinds of products offered, we assess firms’ order entry processes, search tools and other resources. We last covered this topic in 2013.

Eleven of the 19 firms in our coverage group offer fixed income trading online, though optionsXpress’s platform is currently unavailable. While all of the discount brokerages in our coverage group, save Capital One Investing, allow clients to purchase fixed income products online, Merrill Lynch is the only full-service brokerage to do so. On the whole, the fixed income offerings in our coverage group are rather similar. Every firm in this report offers investors a comparable range in products as well as dedicated product screeners and the ability to buy and sell bonds online. The primary differences lie in ancillary features and resources. Only three firms offer a bond comparison tool and allow investors to trade without having to utilize a screener. Additionally, eight firms provide investors with a bond calculator, while seven offer a bond ladder tool.