Which online broker is the best fit for you?

Investing through an online broker is a slam dunk: It's easy and fees are reasonable. The hard part is zeroing in on the broker that's right for you. Looking for the firm with the lowest commissions? Or the one that offers the most commission-free exchange-traded funds? Maybe research is your top priority.

To find the online broker that is best in each of these areas and more, we surveyed 10 firms. Six are better-known outfits: E*Trade, Fidelity, Merrill Edge, Charles Schwab, Scottrade and TD Ameritrade. Four are up-and-comers that cater to some degree to niche audiences: Firstrade, TradeKing, trade­Monster and TradeStation. Why this set? We had one simple condition: To be included, firms had to offer online trading of stocks, ETFs, mutual funds and bonds. That eliminated firms such as T. Rowe Price, among others, that offer bond trading only through a representative. Vanguard opted not to participate, as did Interactive Brokers. The latter is in the middle of beefing up its mutual fund offerings and asked to be excused from this year's survey.

Fidelity earns the top slot, with the best mix of low fees, investment choices, tools, research and other criteria we use to measure the brokers; Charles Schwab is a close second.

But the best broker for you may not be the one that tops the charts. Active traders, for example, may find that seventh-place tradeMonster or eighth-place TradeStation fits their needs best.

Commissions and Fees

Fees and commissions are so low that almost everyone wins in this category. With the playing field that level, however, it's easy to see where some firms shine ... and some stumble.

Annual maintenance fees and levies for low balances are rare. But Trade­Station customers who fail to maintain a $100,000 balance or neglect to actively trade stocks or options will pay a whopping $99.95 monthly fee. Trade­Station also charges a $35 annual IRA fee--no other firm in our survey has such a charge. At TradeKing, inactive accounts with a balance below $2,500 may be hit with a $50 fee.

These days, you can trade for less than $10, and half of the firms we surveyed charge $7 or less. But hyperactive traders may be drawn to the lesser-known firms in our survey. TradeKing and tradeMonster, for instance, charge $4.95 to trade stocks and ETFs. Clients of TradeStation can choose among a flat-rate commission ($9.99 per trade), a sliding scale that cuts the commission rate the more they trade, or a fee of just 1 cent per share as long as they trade in lots of 500 shares or more.

But the three firms nick you in other ways. Each one charges $100 or more to buy and sell 100 Treasury bonds, for instance, a trade that costs nothing at E*Trade, Fidelity or Schwab.

Investment Choices

Yes, you can buy and sell every asset class--stocks, bonds, ETFs and mutual funds--at all of the firms we surveyed. But how big is the firm's inventory of muni bonds? How many ETFs can you buy commission-free? Are you privy to initial public offerings? Can you buy stocks, such as Samsung, that trade on international exchanges?

Schwab tops this category for a slew of reasons, including the 4,968 mutual funds that customers can buy for no up-front load or transaction fee. Fidelity, which has the second-biggest no-transaction-fee fund program in our survey, offers 3,194 funds. TD Ameritrade follows with 2,819 no-fee funds. Frankly, it's a good thing these firms offer so many no-fee funds. Buying a fund that is not on the NTF list at Schwab will cost you $76; at Fidelity and TD Ameritrade, you'll pay about $50.

Schwab is also bulging at the seams with its lineup of 182 commission-free exchange-traded funds. E*Trade (108), TD Ameritrade (101) and Fidelity (81) offer little competition.

We also measured the depth of corporate and municipal bond offerings. Fidelity impresses with its massive muni-bond inventory. Are customers able to get any action with IPOs? Six of the brokers in our survey say no. But the answer is yes at Fidelity, Merrill Edge, Schwab and E*Trade. How about buying stocks in foreign countries, such as Germany, Hong Kong or Thailand? Again, Schwab wins, with access to 61 international exchanges. Some of those exchanges require broker assistance or a global account to trade, but there are no fees to open or maintain an account and no minimum-balance requirements.

The smaller brokers don't score well in this category. They offer plenty of access to secondary corporate and municipal bonds. But their rosters of no-transaction-fee mutual funds and ETFs are spare.

Tools

Tools such as online calculators, screeners and charts can help investors make wiser decisions. Merrill Edge trumps the competition in this category. The firm leverages research and data from its parent company, BofA Merrill Lynch, as well as S&P Capital IQ and Morningstar, to offer screens for ETFs, funds and stocks. It also offers screens for bonds and options. Its hefty calculator lineup helps customers with investing and personal finance issues, ranging from mortgage refinancing and college planning to IRA distributions.

What the score in this category doesn't show is that the brokers that are tilted toward active trading, including TradeKing, tradeMonster and TradeStation, hold their own against the bigger firms when it comes to investing tools. TradeMonster, for instance, offers multiple stock screeners and a bond calculator that allows you to determine how sensitive your fixed-income portfolio is to interest-rate moves. But for the rest of your financial life, you're on your own. These firms don't offer tools that help customers decide whether to open an IRA or a Roth, or how much to save for retirement or for college.

TD Ameritrade lags its better-known brethren. The firm offers the basics: a screener for mutual funds, ETFs and bonds, and portfolio reports that help you analyze your holdings. It's worth noting, though, that TD's platforms for more-sophisticated investors--thinkorswim and Trade Architect, which were not part of the survey--offer loads of investing tools.

Research

Every firm offers some stock and fund research. But as the scores in this group show, some do a better job than others.

Fidelity wins this contest easily. It offers research from 21 firms, including Ford Equity Research and S&P Capital IQ. Customers can read 15 research reports about Apple and seven for the SPDR S&P 500 ETF. Schwab comes in second with research from nearly a dozen firms, as well as proprietary reports covering stocks, funds and the markets. E*Trade is next. It offers research from eight firms, including Credit Suisse, Thomson Reuters and Market Edge.

Again, size seems to make a difference. The smaller firms--Firstrade, TradeStation, Trade­King and trade­Monster--can't match their bigger brethren when it comes to independent research. The active-trader clients of the last three firms might prefer reading technical indicators in a chart instead of a Credit Suisse research report to guide their stock picking. And at Firstrade, clients can access some of Morningstar's premium membership screeners, tools and analysis free. (E*Trade and Merrill Edge, among others, offer many of these services as well.)

The surprising laggard here is TD Ameritrade. The firm offers Morningstar research for mutual funds and ETFs, plus bond research from S&P, Moody's and Municipal Market Advisors. But that isn't enough to challenge the other established firms.

Ease of Use

Can you customize the view of your online accounts, watch lists and news feeds on your dashboard? Filter for the latest news about only your holdings? Execute a trade from a pop-up window or trade bar that doesn't make you leave the page you're on? These are just a few of the features that set some firms apart in this category.

It's not surprising that sites of firms geared to more-active investors--such as tradeMonster and TradeStation--score well. In addition to customization, streaming quotes and easy-to-use order tickets, the firms also offer intricate charting capabilities. But TD Ameritrade holds its own, with streaming quotes on the main dashboard, drag-and-drop customization and a virtual trading tool that allows customers to test investing strategies. Most of the big firms stand high in the rankings, too. Fidelity, Merrill Edge and Schwab score extra points for offering customers annualized performance data for their portfolios. At E*Trade and Schwab, customers can find out how their portfolio has done on a risk-adjusted basis compared with a benchmark.

Mobile Apps

The best mobile apps now allow everything from stock, option and mutual fund trading to bill paying, bank transfers, charting and photo deposits.

Though the race is neck and neck among the well-established firms, E*Trade edges out the competition here. Its mobile app is set up for bond trading, a function none of the other apps offer. And E*Trade's app can be used with Windows and Amazon Fire phones as well as the requisite Android phones and iPhones. Schwab, TD Ameritrade and Fidelity aren't far behind. One fun feature: At TD and E*Trade, you can scan a bar code of a product to find out whether its parent company trades publicly as a stock.

Investment Advice

Clients want investment advice more than ever. And for the most part, these firms are giving it. With an army of 800 certified financial planners, 3,000 registered representatives and more than 325 branches in the U.S., Schwab, the oldest brokerage in this survey (founded in 1971), is the firm to beat in this category.

Though you need $250,000 to be eligible for Schwab's advisory services, those lucky customers have access to specialists in estate planning, options trading and fixed-income securities, in addition to customized investment advice. Schwab also got a boost from the range of its managed accounts. Clients can choose among a portfolio of mostly ETFs managed by Windhaven Strategies, a dividend-growth-oriented stock portfolio from ThomasPartners, and a portfolio that holds a mix of assets from the Schwab Private Client team, among others.

Fidelity's managed-account port­folios can hold stocks, funds, ETFs, bonds and separately managed accounts. That range is enough to set Fidelity apart in this category from other firms, such as Merrill Edge and TD Ameritrade, which offer managed portfolios that hold only mutual funds and ETFs.

Four firms don't offer advice: Firstrade, Scottrade, tradeMonster and TradeStation. But at TradeKing, $10,000 will get you access to 10 preset, ETF-based portfolios designed for certain time horizons, investment objectives and risk tolerances.

Customer Service

To find out which firm earns the most-customer-friendly mantle, this year we turned to J.D. Power, a market research firm, and its study of customer satisfaction among online brokerage firms. The Power study measured 10 firms, among them six from our survey: E*Trade, Fidelity, Merrill Edge, Schwab, Scottrade and TD Ameritrade.

Scottrade won the top spot in the interaction category, which measured, among other things, user satisfaction with customer support by phone, in branches and on the Web. Scottrade has 500 branches nationwide, which helps, and it also scored well in the live phone support section of the study, says Mike Foy, who directs J.D. Power's wealth management practice. Schwab came next, followed by TD Ameritrade, E*Trade, Fidelity and Merrill Edge.

Which Broker Is Best for You?

What matters most to you? Commissions? Investment advice? Maybe the nimbleness of the firm's mobile app? Deciding which firm is right for you may boil down to the kind of investor you are.

Best for mutual fund investors: SCHWAB. There are nearly 5,000 funds in the firm's Mutual Fund OneSource no-transaction-fee network. Need we say more? All are either no-load or load funds with the sales charge waived.

Best for ETF investors: SCHWAB. With 182 commission-free ETFs--some of them Schwab's proprietary funds that invest in broad swaths of the market and charge annual expense ratios of 0.04%--why go anywhere else?

Best for active stock traders: TRADE­STATION. If you trade in 500-share lots, you'll pay $0.01 (yes, a penny) per share to trade the first 500 shares and $0.006 per share thereafter.

Best for investors who are ready for the next step: TD AMERITRADE. The broker has two other platforms designed for more-active traders, Trade Architect and thinkorswim. With no prerequisites, such as a certain number of monthly trades or assets to invest, it's easy for those who are ready to trade more feverishly to move to the next level.

Best for higher balances: MERRILL EDGE. Customers who have balances of $50,000 or more combined at Bank of America and Merrill Edge qualify for free trades on up to 30 trades a month. It's the only firm we surveyed to offer customers with higher balances a break on commissions.

Best for new investors: SCOTTRADE. The simplicity of Scottrade's dashboard is a welcome sight compared with the numerous widgets on other sites.

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Nellie S. Huang is Senior Associate Editor at Kiplinger's Personal Finance magazine.