Aside from this Charles Schwab broker review, we've also reviewed the Charles Schwab Intelligent Portfolios robo-advisor service.
Charles Schwab, which ranks as the third-best broker overall this year, is a full-service investment firm that offers services and technology to everyone from self-directed active traders to people who want the guidance of a financial advisor. It has a wide variety of platforms from which to choose, as well as full banking capabilities. Over the last few years, its web-based platforms have been transformed by a group that is dedicated to seeing things through their clients’ eyes and making the platforms simpler to use while also providing low-cost advice.
Charles Schwab currently ranks in the following categories:
On October 1st, 2019, Schwab announced that it would eliminate base trading commissions on equities, ETFs, and options in the U.S., effective October 7th. This pricing change has been incorporated into our review and ratings. Schwab has also eliminated commissions for trading penny stocks, which is unusual.
Advanced options tools and trading ideas are built into the StreetSmart Edge
Mobile web platforms and native mobile apps offer the same functionality
Some features are divided among different platforms
Push towards using a financial advisor
Interest paid on cash balances is low
Schwab has several platforms that you can launch after logging on to their flagship website, or you can download the StreetSmart Edge platform to your desktop, or run it from the cloud. StreetSmart Edge is Schwab’s advanced platform which features streaming real-time data and news along with a customizable charting toolkit. We reviewed the standard website as well as Street Smart Edge, but they also offer TradeSource, which offers some of the features of both platforms without being as complex as Edge. The StreetSmart.com web application is going to be impacted in the near future by changes to browsers that do not support Java, so those users are encouraged to move to an alternative platform such as StreetSmart Edge in the Cloud or StreetSmart Central.
The workflow on the standard website is very simple, and you can see the progress of your order. All of the platforms have the All In One Trade Ticket available, which lets you build an order using the asset class you choose in a flexible and intuitive way. Quotes update in real time.
Charles Schwab’s wheel-based router is designed to handling exchange outages, perform real-time execution quality reviews and handle volatile markets. Orders in stocks and multiple-exchange listed options are routed to third-party wholesalers, intending to achieve cost savings by minimizing exchange membership costs and other fees. Schwab monitors its execution quality statistics, and the reports provided to clients after every trade include how much price improvement was achieved. Schwab does accept payment for order flow but says that is not a consideration for their routing engine.
The standard website is very easy to use, and navigation has been cleaned up considerably in the last few years. Getting started with one of the StreetSmart platforms may require some additional education, but those tools are easy to use once you are familiar with their capabilities.
Mobile and Emerging Tech
All of your trading customizations and watchlists are stored in the cloud, so you’ll have the same setup no matter which platform you’re using. You can access streaming video and almost all of the education resources from your mobile device as well. Options analysis and trading tools are built into the StreetSmart mobile apps.
Range of Offerings
Schwab has a huge inventory of fixed income issues, and its StreetSmart platforms let you build any sort of options strategy you can imagine. You’ll also find access to a number of international exchanges and data.
News and Research
Extensive equities research from a variety of sources including Credit Suisse, Morningstar, MarketEdge, Reuters and CFRA are available. For real-time news, you can pick up articles from the Associated Press, Globe Newswire, MT Newswires, Business Wire, and many others. Schwab’s proprietary rating system generates grades for over 3,000 companies.
The Idea Hub on StreetSmart gives you several ways to seek out options trading ideas, and links to deeper analysis that you can do before firing off the trade. Charts on the StreetSmart platforms use streaming real-time data, and you can place a trade from a chart if you’d like. You'll find plenty of planning tools for retirement and financial goals.
Portfolio Analysis and Reports
The account summary can be set up to include those held outside Schwab, including real estate, to analyze your entire asset portfolio. You can chart the changes over time, and compare your portfolio performance to a number of benchmarks. The Schwab Portfolio Checkup gives you a picture of your current holdings and compares it to a target asset allocation, and makes recommendations for changes in your holdings to bring you closer to your target.
Customer Service and Help
Besides its online help capabilities, you can visit one of Schwab’s physical offices for more help. The integration of optionsXpress, which Schwab acquired in 2011, enhanced services for clients including portfolio margining, and led to the launch of a stock loan program. Clients who do not qualify for premier support may wait a while on hold when calling in for support. Premier support is available to clients with over $500,000 in their household accounts, or who trade more than 36 times per year.
Education and Security
A recently launched initiative has led to Schwab Live Daily, which provides 4-7 hours of video content every trading day. Most of it can be viewed via a Webex broadcast, and it’s open to clients and non-clients as well. Schwab also offers its Choiceology podcasts, which include information about behavioral economics and how to make better decisions. The firm publishes a magazine, “On Investing,” four times per year.
Clients can also walk into one of Schwab’s offices for 1-on-1 training on topics that include strategies and trading tools. Online, the Schwab Learning Center covers a wide and deep range of educational content that focuses on different skill levels. Trading Paths are a series of bite-sized lessons that combine articles, videos, and worksheets to help clients understand different investing-related topics in depth.
Schwab eliminated its base commissions for stock and ETF transactions as well as its per-leg fee for options trades. Commissions are also eliminated for OTCBB (penny stock) transactions, which is a differentiator. Options trades are now $0.65 per contract, which is a large price cut for smaller multi-leg trades. Their margin rates are average, though lower than TD Ameritrade and E*TRADE.
What You Need to Know
As one of the largest online brokers around, Schwab is able to offer its customers a wide array of services and tools including a top-notch mobile app. Over the last few years, they seem to be encouraging their customers to work with an advisor, whether human or robo. Self-directed traders can still go it alone, while one-stop shoppers will be happy with the combination of brokerage and banking services.
Compare Charles Schwab
As one of our top ranking brokers, Charles Schwab is a great fit for investors at all levels. See how they compare against other online brokers we reviewed.
Charles Schwab Broker Review 2019
Investopedia is dedicated to providing investors with unbiased, comprehensive reviews and ratings of online brokers. Our reviews are the result of six months of evaluating all aspects of an online broker’s platform, including the user experience, the quality of trade executions, the products available on their platforms, costs and fees, security, the mobile experience and customer service. We established a rating scale based on our criteria, collecting over 3,000 data points that we weighed into our star scoring system.
In addition, every broker we surveyed was required to fill out a 320-point survey about all aspects of their platform that we used in our testing. Many of the online brokers we evaluated provided us with in-person demonstrations of their platforms at our offices.
Our team of industry experts, led by Theresa W. Carey, conducted our reviews and developed this best-in-industry methodology for ranking online investing platforms for users at all levels. Click here to read our full methodology.