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The Broker Matrix

The best broker for you depends on what’s important to you.

Back in the April issue, I wrote about my beef with my broker, E*Trade, over $32,000 that had gone missing from my IRA. As I explained then, I had invested in MobilEye, an Israeli company that developed camera-based driver-assistance technology, and the company was acquired by Intel. Before that point, whenever shares of companies I owned had been acquired, I simply let the money make its way to my account. But in this case I was supposed to actively tender my shares, and I missed the tender period because E*Trade didn’t use e-mail or snail mail to notify me of the requirement. The money was sent to an escrow account in the Netherlands, and although I filled out multiple forms and affidavits that E*Trade forwarded, nearly six months later there was no indication that the money would be sent to my account anytime soon.

After a few unproductive e-mail exchanges with E*Trade, I decided to call. The eager, apologetic rep on my “dedicated elite team” wasn’t able to help, so he transferred me to the corporate action department. Here’s where my beef comes in: The employee who picked up there said he didn’t have any information and that there was nothing he could do. He did not offer to investigate further. He seemed indifferent and unresponsive.

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Best brokers. I bring this up because this month we present our annual broker rankings. I eventually got my MobilEye money, but after the debacle I vowed to dig into our rankings this year to see if there was a broker that could offer more hand-holding. We were planning to give our methodology a face-lift this year, so I asked the broker rankings team, with associate editor Ryan Ermey on point and Anne Smith editing, to include premium services for larger accounts as part of the evaluation criteria. Six of the 10 brokers we include in our rankings will assign a dedicated account representative to clients who meet a certain asset threshold. Only at Fidelity, Schwab and TD Ameritrade can clients work one-on-one with a certified financial planner. Clients at Fidelity and TD Ameritrade need accounts with $250,000 or more to access a CFP, but it takes only $25,000 in assets at Schwab. I had a dedicated planner assigned to me at E*Trade, but he stayed conspicuously silent while I was having my MobilEye moment.

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Access to a CFP is only one piece of a complex matrix in my decision. As we make clear in our article, the best broker for you depends on what’s important to you—from the number of no-commission funds available to the depth of analyst research to the agility of the mobile app.

My current broker offers a great menu of services and, to be fair, E*Trade earned the top spot overall in our rankings this year. But I’m looking for someone who will be in my corner and reach out to me at crucial junctures. With retirement on the medium-term horizon, I’ve accumulated a decent-size nest egg in my IRA, and frankly I’d like my broker to acknowledge that with extra offerings. It may be naïve to believe that an entire industry that has replaced human brokers with cheap, automated trades will offer truly personalized service, but I remain hopeful.

One other tidbit to crank into the decision: Some of the brokers are offering a small bounty if you move your money. For example, at TD Ameritrade, you can get up to $2,500 cash along with 90 days of commission-free trading if you open an account with at least $1 million. Ryan gave a rundown of some of the offers on the Kiplinger podcast that aired on August 5).

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