Slide Show | October 2012

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Best Online Brokers for 2012

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The discount brokerage industry has come a long way since Charles Schwab launched his business in 1975. Today, many online discounters look more like the full-service brokerages they used to pooh-pooh. On top of the menagerie of investments available, you can go to some discount brokers for a credit card, a mortgage and other banking needs. More important, you can get nearly all the research information once available only from full-service brokers. Some discounters will even provide investment guidance.

This year, we reviewed ten firms. We analyzed each in six broad areas. First, the obvious: fees and commissions, range of investment options, research and tools that are accessible to all clients, and banking services. We also measured the so-called user experience — the ease of navigation and functionality of each Web site and app. Finally, we put the firms through a customer-service test to vet their representatives’ responses over the phone, through e-mail and via online chat.

No firm aced every category. That meant the final outcome depended to a large extent on how much we weighted the categories. We based our weightings on what our readers consider important: costs, 25%; investment choices and user experience, 20% each; research and tools, and customer service, 15% each; banking services, 5%. (For more on how we ranked our picks, see Best Online Brokers, 2012.) Ultimately, you should decide what you consider most important and choose a broker accordingly.

Slide through to see our rankings of the best online brokers.

Best Online Brokers for 2012
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