Grading with weights Each of the five possible marks represents our evaluation. Each final score isn't an average of judges' numbers in the various categories. Because we'll be using a weighted average to calculate a platform's final score, not all criteria (such as funding availability and diversity) will carry the same weight.
For instance, a platform's costs will carry more weight when it comes to online brokerages. We discover that some aspects are more crucial to users than others, including fees and investment options. If you want to learn more about how we arrive at our ratings, read on.
The most important thing for us to consider is that These identical categories are used to rate all investment products. Still, their relative importance is adjusted for each platform.
Access
We also take into account the availability of human advisor access and other instructional materials (beyond just blog articles). We average the brokerage's ratings in the major mobile app stores and give each element a score out of five for website usability (if applicable). Then, we combine the average ratings for usability with those of the mobile app.
If a brokerage has limited or no access to financial advisors, we will lower their overall rating by a little. Discounts will also be applied to the commissions of brokers who don't provide any educational materials or Frequently Asked Questions sections on their websites.
Ethics
In this section, we examine the platform's legitimacy and legality in the eyes of relevant financial regulation agencies (such as the SEC). Suppose a company is reputable, has never been involved in a scandal or legal action, has all necessary licenses and registrations, and provides excellent customer service. In that case, it will likely obtain the highest possible rating on our site.
Companies with questionable legal standing or those who make too many public statements will be given the lowest marks. Here, we provide the company with a grade based on its performance in each area.
We also consider the platform's Better Business Bureau (BBB) rating, if available, and award a letter grade based on the BBB's grading scale (which goes from A+ to F). Since we average the initial reputability/legal rating with the BBB numerical rating to determine a final score, businesses with lower BBB ratings will receive lower overall ethics scores.
Assistance to Clients
Top-rated platforms should provide round-the-clock customer service in some manner, whether it's phone assistance, live chat, or something else entirely (e.g., a Twitter support page, contact form, or other quick methods of communication).
We will assign lower ratings for systems that only offer phone help or live chat during business hours; however, additional support methods can increase the total grade. Investment platforms that can only be reached via email or another digital medium receive the lowest marks.
Brokerages
Through online trading platforms, brokers provide access to various markets and account structures for individual traders and investors. In determining brokerage rankings, our editors consider the following criteria The highest-rated (4-5) venues featured often have no minimum investment for self-directed accounts and offer commission-free stock, ETF, and options trading. In addition, they will often provide NTF mutual funds and other fee-free fund alternatives.
We'll give poor marks for sites that demand at least $500 to make a transaction (1-3). This range also includes brokers that offer no commission-free trading alternatives and charge a fee for all money.
Choosing Appropriate Investments (20% Weighted)
Stocks, ETFs, options, mutual funds, annuities, bonds, and more from the best brokers in the business are what investors look for in a brokerage with the best investment selection. Ratings are lower for brokers offering stocks, ETFs, options, and maybe one or two other asset categories and even worse for platforms providing only one or two types of investments.
This section details the criteria we use to rate automated investment accounts (Robo-advisors). Simply put, Robo-consultants are computer programs that act as financial advisors. They're perfect for investors who'd rather kick back and let an algorithm or team of specialists handle their trading for them.
Platforms that cost more than 0.50% a year, or $9 a month, received the lowest scores. However, we will award bonus points to the platform if it has steep fees but provides a free or low-cost alternative. If the minimum balance in your Robo-advisor account is more than $1,000, we will deduct 2,500 basis points (or 0.25) from your account.
The most elementary ETF selections can be found on the platforms with the lowest star ratings. In addition, they often provide fewer portfolio and account options, yet functionalities like tax-loss harvesting can nonetheless land a medium in this category. These places get 3–4 stars at best.
