E*Trade was founded in 1982 and commenced with an IPO on August 16, 1996. Their main focus is on financial services that provide an online brokerage and similar related products and services predominantly to individual investors. They are currently headquartered in New York, New York and have 30 retail branch locations across the United States. Additionally, E*Trade has approximately 3,000 employees from customer service representatives, investment professionals and advisors with whom you can consult in person, online, live chat or over the phone.
- Platforms and tools
- Research and insights
- Tools for managing your investments
E*Trade offers a full suite of an easy to use online brokerage, investing and related banking solutions, such as stocks, ETFs, mutual funds, bonds and fixed income, options, futures, and no annual fee IRAs. They provide their users with all the products, tools and services they need to reach their short- and long-term investment goals, including popular downloadable mobile apps for Android and iOS users. E*Trade is an industry leader and was voted Best Of Online Brokers in a Kiplinger's survey and they are also a member of the FDIC. Other benefits of the service include:
Investment Products, Pricing And Rates
E*Trade offers stocks, options and ETFs for a standard $9.99 per trade. The price goes down to $7.99 if more than 150 trades are done per quarter. Options contracts for $0.75, futures contracts for $2.99, bonds for $1.00, mutual funds with a no-load and no-transaction fee are variable and all broker-assisted trades are $25.
Platforms And Tools
- E*Trade 360 - allows you to access all your accounts, positions and more, including streaming quotes, all on one page so you can view everything all in one place and all in real-time.
- E*Trade Pro - is designed for advanced traders and provides the user with sophisticated tools and easier market visibility.
- E*Trade Mobile - allows you to have your portfolio with you at all times. This will give you access to real-time information and allow you to execute trades and more in an instant.
Research And Insights
- Investing Insights - gives the user ideas based on current market trends and investing topics based on time-tested investing principles.
- Independent Analyst Research - this is in-depth, company-specific analysis and company comparisons from outside sources, such as Credit Suisse, S&P Capital IQ, Thomson Reuters and more.
- Financial Pros In The E*Trade Community - this community platform allows users to discuss recent market events, as well as ask questions and get answers from financial professionals within the E*Trade community.
- Stock And Fund Screeners - this is a variety of tools that allow users to perform a search based on a set criteria or via their popular predefined screens.
- E*Trade's Exclusive Top 5 Lists - this is a quick glance list of real-time rankings of stocks, mutual funds, ETFs and more that will help give you a clearer insight.
Tools For Managing Your Investments
- Planning Assistance - with this feature E*Trade will help you build a diversified portfolio and assist you with determining how much you will need to save for your retirement and how to do so with the right investments. You will also have the help of a retirement planning calculator, an online portfolio advisor and mutual fund and ETFs screeners.
- Asset Allocation Advice - this feature will analyze your current holdings, help you create a diversified portfolio and help keep on track should you choose to manage everything yourself or whether you decide to let the E*Trade Capital Management team do it for you. You will also have access to the online portfolio advisor tool as well.
- Tools For Monitoring And Rebalancing Your Portfolio - this feature gives you access to E*Trade's state-of-the-art tools that will help you fine tune your portfolio. It will also help you find hidden risks, check your diversification and calculate potential income from your particular investments. You will also have access to a risk analyzer, portfolio analyzer, and income estimator as well.
- Automatically Build Your Portfolio - with this feature, you just choose your investments and set your schedule, then just sit back and watch your investments automatically grow over time. You will also have access to an automatic investing program tool as well.
Guidance And Advice
- Financial Advisors - E*Trade stresses the fact that you're investing for yourself, but not by yourself and that there's always help whenever you need it. They have financial consultants that will help you with personalized financial recommendations at no charge.
- Managed Account Solutions - with this feature, you have a diversified portfolio managed by an experienced professional of the E*Trade Capital Management team.
- Select Portfolios - allows you to select and buy mutual funds or EFTs with one click, then manage them yourself. You can easily use the online portfolio advisor tool to get started.
- SEC lawsuit
- Higher prices
- 30 trades per quarter for pro
While there are a number of positive aspects of the platform, there are drawbacks as well. This is where you really need to pay attention and consider the facts, the good and bad, before making any final decisions as to whether or not they are the right choice for your online trading needs. Limitations include:
Unfortunately, E*Trade's problems do not stop there. This case has been closed and the SEC announced that E*Trade and their current and former subsidiaries failed in their custodian roles during a four-year period when they inappropriately engaged in unregistered sales of their customers' microcap stocks while blatantly ignoring red flags that such activity was obviously occurring. This resulted in E*Trade being required to pay back more than $1.5 million in disgorgement and prejudgment interest from the commissions they earned on the improper sales, as well as a combined penalty of $1 million.
There are plenty of people who are very happy with E*Trade and would never consider using anyone else. However, they do have a plethora of complaints in other places. We were hoping those complaints would be old; however, we found a good number of the complaints to be recent. Therefore, you should proceed with caution should you decide to give them a try. We can only hope they strive to make some improvement as they have been a big player in the online stock trading marketplace for quite some time.
E*Trade's rates are competitive with other full-service brokerage firms; however, they do have higher stock trade commissions, which is a big part of what makes many people consider another company. So if you are looking for discounted commissions, you won't find them here. But with that being said, you have to remember that you get what you pay for and E*Trade does have plenty of fantastic offerings, which in our opinion definitely makes up for their higher commissions.
30 Trades Per Quarter For Pro
Another thing we aren't too fond of is the fact that E*Trade's Pro platform requires 30 stock or options trades per quarter, or $250,000 in assets, for access. And their Pro system is lacking when it comes to detailed charting and its options potentiality. This might not be an issue for you if you trade often; however, if you don't, this is something you need to take into consideration.
The Bottom Line
Although E*Trade has experienced some turbulence over the last few years, after fully weighing the good and the bad, we feel they deserve a recommendation as a long-standing online financial brokerage. However, with that being said, you should always perform your own due diligence before making a final decision about whether or not they are the right fit for your particular situation. Overall, we recommend E*Trade as a service that can help you with your online trading needs. It may be somewhat complex for those that are just getting started with online trading but it can be one of the best solutions for those that have been in the business longer than the average trader.