Online Broker Rating Methodology

Online Brokers Rating Methodology

We believe in transparency and objectivity, this is why we want you to know how we rate online brokers

Factor Weightings

Online brokers execute orders in the markets for the investments you want to initiate or terminate. For instance, if you want to invest in stocks or ETFs, you need a broker to execute those orders.

To help you navigate your decision-making process, we look at nine key factors we deem necessary for a broker to have. Each factor is weighted depending on how essential that factor is for the proper functionality of the broker.

  • Account minimum (Weight 5%)
  • Account fees and trading costs (Weight 20%)
  • Investment selection (Weight 20%)
  • Types of accounts supported (Weight 10%)
  • Features and tools (Weight 15%)
  • Ease of use (Weight 5%)
  • Trading platform (Weight 10%)
  • Security (Weight 5%)
  • Customer support (Weight 10%)

Account Minimum (Weight 5%)

This refers to the minimum account balance required to open an account. The less amount of money required to open an account will have a higher rating, whereas a high amount of money required to open an account will have a lower rating.

Account Fees and Trading Costs (Weight 20%)

Account and trading fees refer to the fees required to maintain your account and execute orders in the market. In general, the higher the fees, the lower the rating for this factor will be. These fees include but are not limited to;

  • Annual fees
  • Inactivity fees
  • Incidental fees: ACAT transfer fees, statement fees, wire fees, closure fees, check fees, etc.  
  • Securities trading fees: stocks, ETFs, options, penny stocks, mutual funds,  etc.

Investment Selection (Weight 20%)

This factor refers to the variety of investment options at the users’ disposal. This include:

  • Tradable securities (i.e., stocks, ETFs, bonds, mutual funds, options, futures, IPOs, CDs, currencies, and cryptocurrencies)

Types of Accounts Supported (Weight 10%)

This factor refers to the types of accounts available to investors for their investments. The more accounts supported, the higher the rating for this factor will be. The brokers that offer the following accounts will have the highest rating;

  • Taxable
  • Joint
  • Traditional IRA
  • Roth IRA
  • SIMPLE IRA
  • SEP IRA

Features and Tools (Weight 15%)

 This factor refers to the added features and tools a broker makes available to its customers. The more features a broker offers, the higher the ratings will be. Some of the features and tools we consider include:

  • Fractional shares
  • Research tools
  • Fundamentalanalysis tools
  • Technical analysis tools
  • Screeners offered
  • Access to market insight tools
  • Backtesting tools
  • Paper trading
  • Automated trading tools
  • Availability of international exchanges
  • Fractional dividend reinvestments
  • Portfolio tracking tools
  • Trading journal features
  • Variety of order types offered (i.e., market, limit, stop limit, etc.)
  • Charting tools
  • Drawings tools
  • Access to trading on margin
  • Ability to earn interest on cash

Ease of Use (Weight 5%)

This refers to how easy a platform is to use for beginner investors. The easier a platform is to use, the higher the rating for this factor will be. We take into consideration the following factors:

  • Availability of web applications
  • Availability of mobile applications (iOS and Android apps)
  • Overall usability and ease of use of user interface of all portals

Trading Platform (Weight 10%)

This refers to the usability and functionality of their trading platforms (i.e., iOS, Android, Web Application, and Desktop), how well they perform and the features offered. The broker that offers more portals, as well as more robust features and tools, will have a higher rating.

Security (Weight 10%)

When it comes to security, we take into consideration a number of factors. The broker that offers the following security features will have the highest ratings:

  • Protection of customer data
  • Encryption for web and mobile platforms 
  • Two-factor authentication for web and mobile platforms
  • Biometric login for mobile apps

Customer Support (Weight 10%)

This factor takes into consideration how responsive a service provider is when it comes to supporting its customers. A broker that offers the following support will have the highest rating:

  • Live chat for new and existing clients
  • 24/7 phone support
  • Support via email
  • Help center
  • Contact form
  • Ability to speak to a human and representative

Product Updates

Online broker reviews are performed annually; however, our team of writers and editors will make updates to the content throughout the year and as necessary to keep our reviews up to date. We also maintain contact with service and product providers to keep the information as current as possible.

Review Team

Our editorial team oversees all product reviews and follows strict editorial guidelines to ensure we remain objective with our reviews. You can learn more about our editorial team on our about us page and learn how we make money because we like being transparent with our readers.

We always welcome feedback. Contact us at [email protected].