Best Online Brokers for 2017 Identified — by Their Customers

MONDAY, JANUARY 30, 2017 BEST ONLINE BROKERS Best Online Brokers For 2017 Identified — By Their Customers

BY JUAN CARLOS ARANCIBIA INVESTOR’S BUSINESS DAILY To those examples of dominant per- formances, you can start thinking of three online brokerages: Fidelity, Charles SchwabSCHW and TD AmeritradeAMTD. They are again the best in IBD’s fifth annual Best Online Brokers survey. In fact, the trio has been in the top three online stock brokerages for overall customer experience three of the past four years. The rankings provide a unique per- spective to investors who are looking for a broker or just wondering whether their current broker is really the best one for them. That’s because they’re based entirely on ratings by the brokers’ own clients. Investor’s Business Daily and its polling partner, TechnoMetrica Market Intelligence, surveyed 4,752 investors to find out how well their pri- mary brokerage stacked up based on 13 critical characteristics. The 13 performance areas themselves were determined by how much importance investors placed on them. Because needs differ — a novice investor may value different services than an experi- enced trader, for instance — we present the best brokers in each category as well as the best three overall, based on their performance across all the categories. For Fidelity, it’s the third year in a row that the Boston-based firm took the top overall spot. Impressively, Fidelity had the first or second highest customer rating in all 13 survey categories. What grew into one of the leading mutual fund families has now become a force in online trading. As in previous Best Online Brokers surveys, privately held Fidelity met a stiff challenge from Charles Schwab. A small Jose Calvino, an engineer in Greens- What does it take to be one of the margin separated the two companies. boro, N.C., has accounts with four bro- best online brokers? You better have top Janet Malan, an investor who lives kerages. His favorite? Fidelity. While research tools, ETF choices and website in California’sPRINTED Silicon Valley, COPY weighed FORhe doesn’t PERSONAL find a great deal of differ -READINGperformance. The three ONLY. brokerages top - Schwab and TD Ameritrade before set- ence among his brokers, “Fidelity pro- ping the IBD survey shared the highest tlingNOT on Fidelity, FOR largely because DISTRIBUTION of costs vides more flexibility and latitude in the scores in those areas. and the flat fee Fidelity charges for types of trading they allow in various Educational resources, stock trading trades. She found Schwab’s fees higher accounts. ... If I were to consolidated tools and mobile platforms were other than Fidelity’s and Ameritrade’s fee all my accounts to one broker, I would factors that weighed significantly in the structure more complicated. choose Fidelity.” final results. Fidelity, Schwab and TD Ameritrade also led in investment re- performance and equity trading tools For all the digital tools now available search, portfolio analysis and reports, and were the most important characteristics to them, many online investors still crave investment and retirement planning tools. after commissions. In all of those, Fidel- some personalized help. The industry Trade reliability was another fac- ity, Schwab and TD Ameritrade were has responded with individualized ad- tor shared by the top three brokers, al- the top three in the survey. Fidelity and vice. Robo-advisors — suggestions dis- though one in which there was little Schwab also were leading brokerages in pensed from computer algorithms based separation among all brokers that quali- customer service. on the user’s inputs — are available at fied for the survey. As in prior years, the survey analysis many brokerages. The brokers’ research tools was an focused on brokers with at least 125 cli- Merrill Edge (owned by Bank of area that separated the top three from ents who participated. Six brokers qual- AmericaBAC) has just stepped up its ad- the rest, as has been the case in each year ified this year. visory offerings. This month, it launched of the survey. There was a noticeable lag But for the first time, IBD and Techno- Merrill Edge Guided Investing for cur- by the other brokers in the survey. Metrica also took a look at smaller rent Merrill Edge clients and it is expand- Educational resources and invest- brokers with at least 85 customers re- ing to investors outside the brokerage in ment research were other segments in sponding. A separate article examines February. Unlike with robo-advisors, cli- which the top three stood out sharply. the six brokerages that qualified for this ents receive a recommended investment Low commissions were rated highly analysis. strategy from the Merrill Lynch Chief important to investors, yet the top bro- But overall, TradeStation, Merrill Investment Office. kerages didn’t all get the best scores in Edge and Vanguard were the best of Still, IBD’s survey found that online that category. Interactive BrokersIBKR — the rest, earning Honorable Mention. trading remains a predominantly do-it- which uses a commission system based In this group, TradeStation had the yourself endeavor. Results show that in- on the number of shares traded rather most top scores in the 13 broker service vestors value having many tools at their than a flat fee — was the easy leader in categories. disposal, but put less worth on advisory that section. Of the many resources that investors help. Wealth management, automated Scottrade ranked in the best three value most, preferences can change over advice and financial advice networks brokers for low commissions and fees. time, and the latest survey saw a shift in came in below the 13 services that inves- Scottrade also rated among the top bro- which costs, ETFs, education, research tors ranked high in importance. kers for customer service, while Inter- and portfolio analysis gained in relative Ancillary services such as banking, active’s options trading platform ranked importance. At the same time, mobile tax preparation tools and bonds also as one of the best. tools, options trading and bread-and- were low in importance. And despite the Performing well in the areas most butter factors such as site performance, ubiquitous presence of social networks, dear to investors certainly helped the trade reliability and customer service fell investors don’t feel a great need to use top three brokers. Trade reliability, site in priority. those when it comes to their trading.

PRINTED COPY FOR PERSONAL READING ONLY. NOT FOR DISTRIBUTION Top Overall Customer Experience Low Commissions & Fees BROKER STRENGTHS Online brokers compete fiercely on price. Low Commissions & Fees, Trade Reliability, Site Performance, Equity Trading Tools, Customer Service, Research Fidelity Tools, Investment Research, Portfolio Analysis & Reports, Educational Resources, ETF Choices, Options Trading Low-cost — and even free — trades are available, Platform, Investment & Retirement Planning Tools, Mobile Platforms/Mobile Trading Opportunities depending on your account balance, typical transaction size and trading frequency. Still, you Charles Trade Reliability, Site Performance, Equity Trading Tools, Customer Service, Research Tools, Investment Research, Portfolio Analysis & Reports, Educational Resources, ETF Choices, Investment & Retirement Planning Tools, might pay more for other services, like a cash Schwab Mobile Platforms/Mobile Trading Opportunities management account or margin trades. TD Trade Reliability, Site Performance, Equity Trading Tools, Research Tools, Investment Research, Portfolio Analysis Interactive Brokers Charles Schwab Ameritrade & Reports, Educational Resources, ETF Choices, Options Trading Platform, Investment & Retirement Planning Fidelity E-Trade Tools, Mobile Platforms/Mobile Trading Opportunities Scottrade TD Ameritrade

Trade Reliability Site Performance Equity Trading Tools Whether you’re an investment pro or just When you’re ready to buy or sell a stock, you don’t Your trading platform is your connection to learning to invest, you need confidence that want to wait for pages to load on your broker’s the stock market. You have to decide: Does a your trade will go through quickly and at a price website. Nor should you sit through delays as a particular interface work for you? For example, close to what you expect. The reliability of online stock screen runs — or as an outage prevents site are you clearly shown how much you’ve invested brokers has grown markedly over the years, and access. The site must be fast, reliable and require and how much is on margin? Buy and sell top brokers know excellent execution is critical. few steps to get what you need. entries? It’s all a matter of what works for you. Charles Schwab Interactive Brokers Charles Schwab E-Trade TD Ameritrade Interactive Brokers Fidelity E-Trade Fidelity Interactive Brokers Fidelity* E-Trade TD Ameritrade* Scottrade TD Ameritrade Scottrade Charles Schwab* Scottrade

Customer Service Research Tools Investment Research At an online broker, good customer service Do you like to dig up your own ideas? Look for Brokers are endlessly improving their research means not just telephone-based support and the broker that lets you easily screen for stocks offerings to win and retain customers. You short hold times, but also the ability to chat live that match the technical and fundamental can get stock reports, financial forecasts, Wall online with a customer service representative. characteristics you’re seeking. Also look at its tools Street buy and sell ratings, and more, including You also want a firm whose representatives are for researching mutual funds, ETFs, bonds and research on mutual funds, ETFs, options and responsive and knowledgeable. other investments. other investments. Charles Schwab TD Ameritrade Fidelity E-Trade Fidelity E-Trade Fidelity E-Trade Charles Schwab Scottrade Charles Schwab Scottrade Scottrade* Interactive Brokers TD Ameritrade Interactive Brokers TD Ameritrade Interactive Brokers

Portfolio Analysis/Reports Educational Resources ETF Choices Investors want information to help them manage Online brokers now let you pick and choose their money. How is their asset allocation among a dizzying array of educational Brokers often offer free ETF trading. Find changing as one investment advances? How are resources. These resources can include web out which funds are covered, the account they doing this year vs. the broad market? Are tools, downloadable software, online videos and requirements and if fees could kick in, such as they overexposed to an industry? The top brokers even one-on-one consultations with advisors for for short-term trading. help customers stay on top of their portfolios. qualified customers. Fidelity Interactive Brokers Fidelity Interactive Brokers Charles Schwab Interactive Brokers Charles Schwab E-Trade Charles Schwab E-Trade Fidelity E-Trade TD Ameritrade* Scottrade TD Ameritrade Scottrade TD Ameritrade* Scottrade

Options Trading Planning Tools** Mobile Platform Options can be complex. Education is crucial. The Are you investing enough to hit your goals? What Phones and tablets can provide access to quotes, best brokers in this area offer sophisticated, high- income will you need to retire, given different news, streaming charts, order entry and more. tech trading platforms and a focus on educating inflation rates? Calculators and other tools can put The best mobile platforms are some investors’ investors.PRINTED COPY FORyou on track. PERSONAL READINGpreferred tool. ONLY. TDNOT Ameritrade* FOR Charles DISTRIBUTION Schwab Fidelity E-Trade TD Ameritrade* E-Trade Fidelity* E-Trade Charles Schwab Scottrade Fidelity Interactive Brokers Interactive Brokers Scottrade TD Ameritrade Interactive Brokers Charles Schwab Scottrade *New to top five in overall list or category. **New category. Results are based on a study by Investor’s Business Daily and TechnoMetrica in which 4,752 visitors to IBD’s Investors.com website who use online brokers were surveyed from August to December 2016.

(#S036630) Copyright 2017 by Investor’s Business Daily, Inc. Reprinted with permission. To subscribe to Investor’s Business Daily, please call (800) 831-2525 or visit us online at Investors.com. For additional information about reprints or permissions to use Investor’s Business Daily content, please visit IBDreprints.com or contact PARS International Corp. at (212) 221-9595. MONDAY, JANUARY 30, 2017 BEST ONLINE BROKERS It’s A 3-Peat: Fidelity Tops IBD’s Best Online Brokers Survey Again

Ram Subramaniam, president of retail brokerage services at Fidelity, says the firm takes pride in its price-improvement feature. (KAYANA SZYMCZAK/IBD)

BY DAVID SAITO-CHUNG So is it any surprise to investors that “We strongly believe in customer val- Fidelity has capitalized on its unique ue, and 2016 was another banner year Without an iota of doubt, the folks at history to also become one of the most for Fidelity to bring a better customer Fidelity know equity and bond markets. respected players in the online broker- experience,” Subramaniam, who joined The Boston-based money manager age field — so much so that in 2017, its Fidelity after stints in wealth manage- has decades of experience on “the buy clients participating in a major IBD sur- ment at Morgan StanleyMS and bro- side.” That is, Fidelity’s mutual fund vey gave it the highest Overall Customer kerage operations at Fidelity rival TD managersPRINTED and fleet of COPY mutual funds FORExperience PERSONAL index rating for a third year READING AmeritradeAMTD, told ONLY. IBD. have accumulated an enviable depth of in a row? The 2017 IBD Best Online Brokers knowledgeNOT in researching,FOR DISTRIBUTION buying and Likely no. But talk to Ram Subrama- standings are based on an annual sur - selling financial securities. It has done a niam, the head of Fidelity Investments’ vey of thousands of investors by In- staggering amount of business with ma- retail brokerage business, and you get vestor’s Business Daily and polling jor securities dealers on Wall Street that the sense that it is hungry to stay atop partner TechnoMetrica Market Intel- represent “the sell side.” the heap for years to come. ligence. The investors were asked to rate their experience with their pri- More incentives to save for retire- and a heat map to spot unusual buying mary online broker on 13 important ment: For customers who open a new and selling across various industries and service areas. (See a full explanation in IRA, Fidelity matches contributions of sectors in the equity markets. our article on the best brokers survey up to $1,950 each year for three years, Fidelity engaged with a group of ac- methodology.) and the reason is simple. “We’d like peo- tive traders to co-create, test and im- Besides nabbing the top score in ple to save more for retirement,” Subra- prove the platform. It also launched a Overall Customer Experience, Fidelity maniam said. “strategy desk” in which customers can held on to the top rung in four of the Fidelity also now offers a Visa credit call in to receive one-on-one or one- 13 categories — research tools, portfo- card with no annual fee and a 2% cash- to-many coaching on advanced trading lio analysis and reports, investment re- back reward for all purchases. Subramani- such as options. search and educational resources. Plus, am says that a family that spends between One more way that a retail customer it garnered the highest rating in a new $30,000 to $40,000 per year can generate benefits by having a Fidelity account is category, investment and retirement $800 in cash back each year, enough mon- the immediate access to perspectives planning tools. ey over time to pay a good deal of a child’s from Fidelity’s seasoned team of money And Fidelity received the second- college tuition costs for a year. managers — or the buy side. highest score in all eight of the other In the Jan. 4 article “Bonds 2017: A categories, spanning from ETF choices More commission-free investment New Dynamic,” found in the Investing to trade reliability to mobile trading vehicles: 91 ETFs are now commission- Ideas section of “Fidelity Viewpoints,” platforms. free, triple the number from four to Ford O’Neil, who manages the Fidelity One of the best examples of how five years ago. They include all 18 core Total Bond FundFTBFX, singles out the fi- Fidelity’s vast knowledge of the capi- iShares ETFs. Fidelity also offers 3,600 nancial and energy sectors as investing tal markets translates into better value mutual funds with zero transaction fees. opportunities in the corporate bond for its retail customers is perhaps its space. Why? price improvement feature on all eq- More mobile services: Subramaniam He, like many Wall Street observers, uity trades. Based on an independent says that the number of check deposits sees the new Donald Trump adminis- study commissioned by Fidelity, over made by simply taking a smartphone tration as likely to take away some of a 12-month period through Novem- snapshot of the check has jumped 250% the burdensome and costly regulations ber 2016, the average discount on eq- over the past three years. placed on companies in both fields dur- uity trades involving a minimum 1,000 ing the eight-year term of former Presi- shares was $10.97 for Fidelity custom- A completely overhauled research sec- dent Obama. ers vs. average savings of just $1.90 per tion: Its web pages are now fully respon- “Many companies have told me that trade industrywide in the 12 months sive to the type of internet-enabled device regulatory burdens are among the larg- through Sept. 30, 2016. being used, and contain more relevant est challenges they’ve had to deal with in That savings represents a better buy data on specific stocks in a customer’s ac- the last eight years,” O’Neil was quoted price than the national market system’s count. Subramaniam calls it “personalized as saying. O’Neil is not related to William best offer and a better sell price than the data.” He adds, “It’s really about driving O’Neil, IBD’s founder and chairman. national best bid price at the time of the well-informed decisions by the customer.” O’Neil stresses caution in agency order. The average price improvement mortgage-backed securities because they is also larger than the $7.95 that Fidelity Lower bond commissions: According “are trading at valuations that are closer charges for each equity order. How does to Subramaniam, a study found that Fi- to Treasuries than what is typically seen. Fidelity pull this off? delity can help customers save as much In other words, the yield spread between According to Subramaniam, Fidelity as $14 for every bond with a $1,000 face these two categories of bonds has tight- has a capital markets group that special- value traded. So a buyer of $100,000 ened,” according to the article. izes in order execution, and it actively worth of corporate debt can save as A potential rise in inflation is a key seeks the best venues for executing cus- much as $1,400 in transaction fees. theme for 2017. O’Neil suggests not just tomer trades. “We try to create compe- TIPS (Treasury inflation-protected se- tition among market makers,” he said. More robust ETF screening: Last year, curities) but also floating-rate loans, “We take a lot of pride in that price im- Fidelity debuted a thematic ETF screen- while holding credit risk, offer relative- provement work.” er, allowing customers to search ex- ly high yields and could counter the ef- A Fidelity investor, upon logging in, change traded funds by category, such as fects of higher prices. can easily track these trade execution international and fixed income. “If the Fed raises rates more aggres- savings on a month-to-date and year-to- sively than expected, floating-rate loans date basis. A more useful platform for active probably won’t be hurt as much as tra- Here are other milestones that Fidel- traders: Fidelity enhanced its active trad- ditional bonds because floating rate pay- ity hit in 2016 in its drive to be the No. 1 ing platform’s dashboard so that a user can ments are indexed to interest rate levels,” destination for retail investors: quickly spot key macroeconomic news Fidelity wrote.

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(#S036630) Copyright 2017 by Investor’s Business Daily, Inc. Reprinted with permission. To subscribe to Investor’s Business Daily, please call (800) 831-2525 or visit us online at Investors.com. For additional information about reprints or permissions to use Investor’s Business Daily content, please visit IBDreprints.com or contact PARS International Corp. at (212) 221-9595. The following disclosures should be added in place of what is currently on the IBD proof in 8-‐point font:

Free commission offer applies to online purchases of select iShares ETFs in a Fidelity brokerage account, which may require a minimum opening balance of $2,500. The sale of ETFs is subject to an activity assessment incipal). fee (from $0.01 to $0.03 per $1,000 of pr iShares ETFs are subject to a short-‐term trading fee by Fidelity if held less than 30 days.

ETFs are subject to market fluctuation and the risks of their underlying investments. ETFs are subject to management fees and other expenses. Unlike mutual funds, ETF shares are bought and sold at market price, which may be higher or lower than their NAV, and are not individually redeemed from the fund.

For iShares ETFs, Fidelity receives compensation from the ETF sponsor and/or its affiliates in connection with an exclusive -‐ long term marketing program that includes promotion of iShares ETFs and inclusion of iShares funds in certain ms. FBS platforms and investment progra Additional information about the sources, amounts, and terms of compensation d can be foun in the ETF’s prospectus and related documents. Fidelity may add or waive commissions on ETFs without prior notice. BlackRock and iShares are registered trademarks of BlackRock Inc., and its affiliates.

Options trading entails significant risk and is not appropriate for all investors. Certain complex options strategies carry additional risk. Before trading options, contact Fidelity Investments by calling 800-‐544-‐5115 to receive a copy of Characteristics and Risks of Standardized Options. Supporting documentation for any claims, if applicable, will be furnished upon request.

Investing in bonds involves risk, including interest rate risk, inflation risk, credit and default risk, call and liquidity risk.

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The APR may vary and as of 2/8/17, the variable APR for Purchases and Balance Transfers Advances is 14.49%. The variable APR for Cash is 24.49%. Cash Advance fee: 3% of each advance amount, $5 minimum. Convenience , Check fee: 3% of each check amount $5 minimum, Cash Equivalent fee: 3% of each cash amount, $10 minimum. Balance Transfer fee: 3% of each transfer amount, $5 minimum. There is a $2 minimum interest charge where interest is due. The annual fee is $0. Foreign eign Transaction fee: 1% of each for purchase transaction or foreign ATM advance transaction in U.S. Dollars. 1% of each foreign purchase transaction or foreign Currency. ATM advance transaction in a Foreign We may change APRs, fees, and other Account terms in the perience future based on your ex with Elan Financial Services and its affiliates as provided under the Cardmember Agreement and applicable law.

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