Over the past few years, the nature of online investing has changed. Online brokers have added lots of new products and services, ranging from new investment options to more online education and social networking features. Mobile apps in particular have proliferated and are now used by the majority of investors, according to Barron's reviewer Theresa W. Carey. She adds that Barron's is "so impressed with the real and potential gains in mobile" that its 17th annual ranking of online brokers takes mobile offerings into consideration.
Many low-cost online brokers, having lowered their commissions and fees, are looking for new ways to raise cash. That's more of a problem for some than others. "Contrary to what some believe, this is not necessarily a bad thing, providing that firms are showing value to their investors in terms of resources and tools and ensuring investors clearly understand how and why they're charged these fees," says David Lo, director of investment services at J.D. Power and Associates.
For this report, we found lots of current and comprehensive reviews of online brokers. A review at SmartMoney magazine, for example, names the best online broker (as well as the worst) in each of six areas, including commissions and fees, research and customer service. A chart ranks the 10 brokers covered in the review. Kiplinger.com is another credible source; its review identifies the best online broker for different kinds of investors and ranks 14 of them.
Barron's ranks the top 27 online brokers and assigns those scores in each of eight areas. The comparison charts in that review make it a valuable resource for investors who want to compare brokers on specific criteria. We also looked at a large customer-satisfaction survey from J.D. Power and Associates and a subscriber survey by ConsumerReports.org.