In the landscape of online brokers, Charles Schwab offers one of the most well-rounded and comprehensive services out there right now. With the sheer scope of products, tools, and research – most traders and investors will find something to appreciate. On the most basic level, Charles Schwab allows the usual menu of foreign and U.S. investment vehicles:
- Mutual Funds
- Options Contracts
There are a few barriers holding Charles Schwab’s service back from being flawless, the biggest being a not insubstantial $1,000 minimum balance, higher prices on a few non-Schwab products and some limited educational resources for new investors. Those limiting factors will likely evaporate or go unnoticed for all but a few very specific kinds of investors.
“If you want to do sophisticated trading strategies then Schwab has you covered. They have a tool called Streetsmart Edge that is really slick. I played with it some time ago and I was really impressed with it. Again though as I am not really an active trader I had limited use for it. What I am trying to say is that Schwab does a really good job of providing services for their clients. They have everything from simple web based mutual research and purchasing to advance trading tools and analytics. My only real gripe with Schwab Bank is their paltry interest rate. I think it is the lowest I have seen out there.” – Morningstar forum user caserojj
WHO’s IT FOR?
Retail and Day Traders: One of the most immediately striking features Charles Schwab’s has going for it is the low $4.95 per-trade commission on stock transactions. That’s the low-end average among brokers and is only rivaled by Ally Financial and a few other brokers.
Long-Term Investors: Charles Schwab is full of resources tailored to those who are looking to beef up their savings portfolio. There are no account service or maintenance fees, and those looking for guidance can turn to Charles Schwab’s consultants online or in person as well as the broker’s no-fee Intelligent Portfolio robo-advisor.
Traders Who Like Choices: Charles Schwab has a lot of alternatives for pretty much any species of the trader. That includes 200+ no-fee ETFs, dozens of no-transaction-fee mutual funds, research and resources Briefing.com, Credit Suisse, Morningstar and a handful of other in addition to their own proprietary research. All of this, plus access to both Charles Schwab’s online trading and research site and its software-based premium platform, is available to every account holder.
FEES AND COMMISSION
For those focused on finding a value broker for their trades, Charles Schwab definitely bears strong consideration. For one, while there is a $1,000 account minimum, there aren’t any service charges for holding an account and that minimum balance can be waived if you set up a monthly $100 deposit into a Schwab One brokerage account. On top of that, their per-trade commission on stocks is one of the cheapest at $4.95 for online trades.
Additionally, Charles Schwab offers more than 200 no-fee ETFs and a rotating selection of mutual funds that have no transaction fees. The fee for options is about standard for online brokers at around $0.65 a contract and account transfers come in at $25 for a partial and $50 for a full transfer.
Overall, Charles Schwab is comparable, if not more affordable, than other brokers in most aspects. However, this comes with the caveat that, outside of the “Schwab OneSource” fee-free mutual funds, mutual fund traders are hit with a $76 commission. By far the highest fund fee among major brokers.
PLATFORM AND TOOLS
One of the strongest features in starting an account with Charles Schwab is that the array of tools and resources investors can take advantage of right from the jump.
The core of these features is StreetSmart Edge, Schwab’s premium research and trading platform that is available to all clients. StreetSmart Edge is comparable to the better premium platforms on offer from major brokerages, with a little less capacity than TD Ameritrade’s Thinkorswim platform.
Apart from its software, Charles Schwab’s browser-based trading site also performs admirably, providing traders stock, ETF, mutual fund and even options screeners.
Those looking for insight into their assets or overall portfolio have recourse to Schwab’s Trade Source page. Customers with a minimum $5,000 in their account also have access to Intelligent Portfolio, the brokers no-fee robo-advisor, one of the few gated tools on the site.
However, one area where Charles Schwab’s platform falls short is catering to new or inexperienced traders. As mentioned, the robo-advisor is off limits to those with an account balance below $5,000 and those without any market experience may have difficulty getting acclimated due to the lack of any substantial online tutorials or simulated trading.
Apple and Android users can download the Charles Schwab app to access the trading platform on the go. While most of the features of StreetSmart Edge are present, some aspects, like alerts are strangely absent. Otherwise, the mobile app is a solid option.
In addition to Charles Schwab’s own robust research, particularly with regard to mutual funds, clients also have access to news, ratings, and commentary from Credit Suisse, Morningstar, Reuters and Standard & Poor among others. Users also have access to an economic calendar populated by Econoday and Briefing.com.
Charles Schwab clients have a selection of avenues for getting in touch with the broker.
- 24 hr phone support
- Live chat
- Email support
- Advisors and consultation available at 300 Charles Schwab branches
The online response to some of these points of contact, particularly through email, have shown some mixed experiences. However, the live chat is a solid resource for those looking for a walkthrough of the platform.
- Beginner investors
- Advanced traders
- Investors seeking commission-free etfs
Its pricing and selection of no-fee products alone might qualify Charles Schwab as a contender among the top brokerage services. The added benefits of a solid and reliable trading platform, as well as a host of research, guidance and investment tools on offer for every client, should prompt any trader or investor to seriously consider opening an account with Chuck.
While there are certainly drawbacks to Charles Schwab’s services, and the $1,000 barrier to entry might scare some new investors from opening an account, the variety of things Charles Schwab does well could serve as a strong incentive to all but a few very specific kinds of traders.
- Those looking for a discount will likely find it
- Outside of the no-fee selection, Mutual fund fees are extremely high
- The vast majority of the service is available to all clients
- Solid platform in StreetSmart Edge and myriad research sources
- Limited help for novice traders