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LAST UPDATED: June 27th, 2019
ZionsDirect is an online brokerage firm that offers mutual funds, ETFs, and options for its clients to invest in. Along with these investments, the firm provides 30,000 fixed-income securities and bonds. The brokerage firm also uses its innovative ZionsDirect Auctions where bidders can set the yield on fixed-income investments. Founded in 1955, ZionsDirect caters to self-directed investors, especially traders interested in fixed-income products. The firm aims to create a long-term relationship with its investors, helping them see long-term successes while placing trades. Its association with Zions First National Bank also means it can offer specific services through its parent company like banking services, loans, and wealth management tips.

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The Good

  • Auction platform
  • Integration with Zions First National Bank
  • Client support
ZionsDirect offers a wide variety of bonds to choose from, ranging from government bonds to bank-issued certificates. This in and of itself sets it apart from the competition, which tends to offer a limited number of bonds. The brokerage firm's unique, auction-style platform is another distinguishing factor allowing traders to create a free bidding account, purchase bonds, and other investments, before setting yields on their fixed-income investments. The firm also features a side-by-side comparison chart that shows its range of investment offerings compared to the limited choices that clients will find among its competitors. It's no wonder Bloomberg Businessweek spoke highly of the brokerage firm saying it "has left most rivals in the dust." Other benefits also include:

Auction Platform

Users of the brokerage firm also rave about the auction's platform. The platform boasts a clean design and a user-friendly interface. It offers real-time data, research reports, and other key tools to help guide investors while they place trades. Users also hail the firm's online application process, which can take less than 10 minutes to complete. This means investors have more time to spend on what matters most, planning for and placing trades.

Integration with Zions First National Bank

When it comes to customers who bank with Zions First National Bank, they reap certain benefits that other traders do not. These investors can seamlessly transfer funds from their banking account to their trading account whenever necessary. They can also take advantage of their bank's physical branches to go and talk about their investments with live representatives. The bank boasts 400 retail locations, across the country, where investors are always welcome to visit. These investors also have access to certain benefits like discounted trades. Since banks tend to assess their relationship with clients before providing benefits, a Zions First National banker is more likely to gain access to discounted trades, premium account services, and lower lending costs. Bankers with the brokerage firm's parent company also have access to financial advisors. These advisors assist with most investor related inquiries.

Client Support

In addition to financial advisors, the brokerage firm provides outstanding customer services from 6 AM to 10 PM MT, each weekday. They can be reached via phone or email and they're also available, albeit for shorter hours, on Saturdays for when investors require weekend assistance too. Investors can also connect with the brokerage firm on social media, namely on YouTube, Facebook, and Twitter.
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The Bad

  • Rates
  • Education and research tools
Unlike a lot of its competitors, ZionsDirect doesn't offer live chat services, just phone, and email support. This puts the firm at a disadvantage when trying to cater to investors who would like to have multiple ways of communicating with their brokerage firm. Additionally, while the firm provides mobile trading services, it doesn't offer a specific app for android and iOS devices. This means that traders on the go who require a comprehensive trading app to quickly place trades will instead have to go through a longer process of accessing the platform, through a mobile, online browser. Other limitations to the service include:

Rates

ZionsDirect commission rates are fairly high when compared to the industry average for what its competitors charge. It charges $9.95 per trade for stocks and ETFs. Options trades come up to a $10.95 minimum plus $1.50 per contract. These fees are incredibly steep, especially since some of the firm's competitors charge $2 to $3 less than this flat-rate fee. ZionsDirect also charges a base fee for penny stocks, which is another steep fee at a whopping $29.95 plus an additional $0.01 per share. Investors should be aware of these fees so as not to be blind sighted when placing trades with the firm. One great way to avoid hidden fees is to elect to receive online statements, as paper statements come with a fee. This election can save investors $60 a year. Additionally, investors should ensure they remain active on their accounts or else they'll be charged $100 for inactivity. Fortunately for them, they just need to make one trade in order to avoid this fee.

Education and Research Tools

When it comes to educational resources and research tools, the brokerage firm pales in comparison to its competitors. It provides basic information on bonds and retirement accounts but doesn't provide guides on how to invest wisely, how to understand market volatility, and other key pieces of information that investors, especially novice investors, will find useful throughout the investing process. While the firm does provide access to an active blog that shares investor related information, the general consensus among critics is the firm lacks crucial third-party research to help inform its investors about placing trades.
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The Bottom Line

ZionsDirect is a great brokerage firm, especially for customers who already bank with the firm's parent company. These investors can reap the specific benefits that come with using the same company for their banking and investing needs. These benefits include being able to move funds between their banking and trading accounts, accessing financial advisors, and being eligible for certain discounts. Additionally, for bond traders, ZionsDirect is an ideal brokerage firm due to its sophisticated platform and its provision of a variety of bonds. Having said all of this, for traders who aren't interested in bonds and fixed-income securities, other discount brokerage firms might be better alternatives. ZionsDirect charges high commission rates when compared to what its competitors charge for similar services. Additionally, for novice investors who require more assistance, research tools, and educational resources, ZionsDirect could disappoint in these departments. These beginner investors might be better off going with another brokerage firm that provides the relevant materials they require to be well-informed traders during the investment process.
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