Comments: 15 Questions to Ask Discount Brokers

Here's a comment to my post titled 15 Questions to Ask Discount Brokers that mirrors some of my own experiences:

I was 100% happy with HarrisDirect. Harris Direct had great service and a nice website that was very easy to navigate. Then my account was transferred to E*Trade when they bought HarrisDirect. I am 100% unhappy with E*Trade. In the first month, my average customer service hold time was 1 hour. I have even had unauthorized trades made. When I call customer service, I am never satisfied with their help. Due to all the issues, I requested that E*Trade waive my $60/account fee to close my account. I have 7 separate accounts (2 Roths, 1 IRA, 3 Education Savings Accounts, and a taxable account). So for me to transfer out of E*Trade it would cost me $420. E*Trade refused to waive the closure fees even with all of these issues (some of them they admit to). Warning ... DO NOT open an account at E*Trade.

I was going to post a rant on E*Trade myself, but I might as well include it here.

For two years in a row now, E*Trade has sent me an end-of-year statement detailing my dividends, capital gains, etc. For two years in a row now, I've used these statements in preparing my tax information for my accountant. For two years in a row now, she's used that information to prepare my taxes. For two years in a row now, E*Trade has sent me REVISED year-end statements sometime in MARCH that were completely different than the original ones. For two years in a row now, this has forced my accountant to re-do a portion of my taxes -- and we know that accountants don't work cheaply.

I contacted E*Trade about this last year, and they gave me some run-around story about their system, that they have the right to make changes to statements, yada, yada, yada. Somehow every other broker in the world gets it right the first time and doesn't re-do their statements. Why not E*Trade?

On the other hand, I just had a very pleasant customer service experience with Ameritrade this morning. My perception of them is improving.

Comments

[Mike]

I heard nothing but horror stories about E-Trade. I feel for you. I tried Scottrade because of the low cost. But, you get what you pay for, so I closed my account.

I've had a Vanguard Brokerage account for years and I'm glad I never closed it. Of course, the trading costs are a little higher, but I haven't had any major troubles and the customer service has always been superior. I also get a great return of my Prime Money market account. This is the only brokerage that I use and would recommend it to anyone.

[Kirk]

I get the same runaround from Sharebuilder. They claim it has to do with provisions in the tax law dealing with foreign dividends. Their explanation is that when ETFs/Mutual Funds distribute dividends, they have to calculate foreign taxes paid on those dividends to pass along to you. For some reason those numbers are recalculated sometime in February (for Foreign Tax Credit purposes for the entity's tax return, maybe?) resulting in a change to foreign dividends, foreign tax paid, and "qualfied" dividends for the lower 15% tax rate.

At least that's their explanation mixed with some of my tax training.

[Marty]

Anybody know anything about TDWaterhouse?

[bsaryder33]

I have preferred the service FIRSTRADE & Fidelity over Ewait..trade for a couple of months now and I find them both to be fast, friendly, easy, and affordable.

[Market Participant]

I use Ameritrade and so far haven't had any problems. Trades are $10.99 which is not the cheapest, but the site is nice and convenient. One thing I like is the access to S&P Stock reports. It's nice to have decent quality third party research to work with. However Ameritrade's stock screener is quite weak compared to those on Zacks.com, and I like to use the free Validea screener at nasdaq.com.

Recently Ameritrade has started a new bare bones service called Ameritrade iZone which I've blogged about.

http://gewinnvortrag.blogspot.com/2006/04/ameritrades-new-izone-all-trades-only.html

The $5 flat rate trades are very compelling for people who meet the minimum balance requirement of $5000.

MP

[Ernie]

What is the current yield on an ATT bond? What is the current yield on a VZ Bond?