Wells Fargo’s brokerage, WellsTrade, is light on tools and products and heavy on costs. However, investors who are looking for wealth management and advisory services but who don’t plan to be very active in their own self-directed investing may not mind some of WellsTrade’s shortcomings.
The WellsTrade brokerage is likely best suited for investors who rely on Wells Fargo for their banking and wealth management needs. Investors who prioritize analyst research and sell side recommendations may also find what they are looking for at WellsTrade. However, in both cases, very active investors looking for low-cost and high-quality tools will be disappointed.
Extensive research and analyst recommendations
Order entry is manual but very simple and easy to understand
24/7 phone support is readily available and very helpful
Charting and screening tools are of low quality
No forex, crypto, futures, or futures options trading
Higher than average costs compared to other discount brokers
Investors can enter orders for stocks, single-leg options, ETFs, and mutual funds very easily. WellsTrade does not offer advanced order types like OCO or OCA, but investors can use standard limit, market, and stop orders. The order entry process is simple but manual and could become very repetitive for active investors. Orders can be started from watchlists or screener results. The WellsTrade platform is web-based and it takes a while to navigate from one page to the next, which makes the order entry process tedious. However, we are impressed to see that investors can make tax lot choices right from the order entry window. Option spread traders will have to call a broker to make those trades as a single order, which will incur an additional commission.
The portfolio tool offers a small amount of customizability but otherwise, the WellsTrade platform cannot be modified. Investors cannot trade from the charts and more complex order entry choices such as staging or basket orders are not available. If you’re not trading very frequently, and you like the connection between WellsTrade and Wells Fargo’s banking and advisory services, these issues may not be a big problem.
There is little trading technology that stood out at WellsTrade. Most of the web pages in the platform include delayed quotes, and the quotes in order windows are refreshed manually. Although WellsTrade will accommodate account holders who have specific order-routing requests, the trade execution process is standard compared to other firms that do not specialize in active investors.
WellsTrade works with several clearing firms, such as Apex and Citadel, and they accept payments for order flow. This can create a conflict of interest because brokers should be doing everything possible to get the best price for clients, but they have an incentive to route orders to the clearing firm that will pay the most. Payment for order flow can increase the indirect costs of trading with WellsTrade.
Setting up an account with WellsTrade is quick and easy. Receiving options and margin approval takes longer, but it doesn’t require very much additional paperwork. The account setup process can be completed online, and email confirmations arrived almost immediately. Once new account holders have their log-in information, they should find the web-based platform easy to navigate but very slow. Most of the account functions, research tools and order entry can be found under two-level menus.
Order tickets are not available across the platform, however, navigating to an order ticket from most of the pages on the platform is easy for patient folks. There are a few functions that can be customized into alternative layouts, but otherwise very little of the platform can be modified. One of these customizable features, Portfolio Tracker, existed separately from the brokerage website and has very limited functionality besides the flexibility of alternative layouts.
Mobile and Emerging Tech
The WellsTrade mobile app integrates seamlessly with the web application. Changes made in the account or watchlist on the web platform are immediately available in the app. The order-entry process is nearly identical for stocks, options, and funds; however, tax lot choices cannot be made in the mobile version of the order ticket. The mobile app did not accept advanced order types, and the quotes on many pages were delayed by 15 minutes.
There is some rudimentary charting, and news feeds are available in the mobile app, but both the charts and the news offerings are probably too limited for investors to use in their analysis. The mobile app allows for fingerprint security, and navigation through the menus is a little faster and easier than it is in the web-based platform. Probably one of the best things about the mobile app is its integration with Wells Fargo’s banking and wealth-management apps.
Range of Offerings
WellsTrade will probably meet the needs of casual investors interested in stocks, ETFs, funds, fixed income, and options. However, WellsTrade provides no access to futures, futures options, crypto, or forex trading. For passive investors, there is a wide selection of no-transaction-fee mutual funds and an acceptable mutual fund screening tool.
Because WellsTrade is associated with Wells Fargo and their wealth-management business, their robo-advisor product may be ideal for investors seeking a low-cost portfolio advisory service that includes some access to human advisors. The default portfolios offered by the robo-advisor are very typical of others in the industry.
News and Research
The fund screening tools at WellsTrade are fairly standard compared to others in the industry. The stock screening tool, however, is very limited in its functionality with many of its filters lacking context. While most investors are likely to find the WellsTrade screening tools too limited to be useful for advanced research, it is convenient to be able to create a trade ticket from the search results list.
Market news is provided by Reuters, and most of the research in the WellsTrade platform is created by internal Wells Fargo analysts. We found the research reports, market commentary, and investment recommendations to be above average compared to the industry. Investors focused on long-term holdings will likely appreciate access to much of the sell-side research provided by WellsTrade.
Portfolio Analysis and Reports
The WellsTrade portfolio analysis tools are above average compared to other discount brokers. Investors can see charts and tables that break down the holdings in their portfolio by asset types. Performance reports are easy to access and very detailed. However, this experience can be improved significantly if an investor wishes to work with an advisor. Working with an advisor adds costs, but some investors may find this necessary to fill in the gaps in their own investing skills.
Investors have the ability within the order ticket to make tax choices in order to optimize their account management. Further, the tax accounting reports are detailed and useful. Again, working with an advisor would improve your tax planning but may add additional costs.
WellsTrade offers 24/7 access to customer support. We found the customer service reps and brokers to be very professional and knowledgeable, and hold times are small. Outside of a frequently asked questions page, there is limited online help. For example, WellsTrade doesn’t offer online chat support.
Other special features like a stock loan program are also not available. WellsTrade has the advantage of being associated with Wells Fargo and its branch office network, but there aren’t brokers available in all branch offices so access to in-person support will vary depending on where you are located.
Education and Security
Online education is virtually nonexistent outside of FAQ pages and other brief snippets. New investors may struggle with basic investing concepts won’t find much help, and more importantly, they may find learning how to navigate the WellsTrade tools difficult. For example, nonprofessionals or investors with limited experience screening for stocks are unlikely to be able to navigate the screening tools on their own. There is some accompanying educational content included with the retirement planning tool, but it lacked any real depth. In our opinion, the focus of WellsTrade seems to be mostly on clients who rely on an advisor to help them with their questions.
Account holders at WellsTrade can set up two-factor authentication and use biometric security (fingerprint ID) on the mobile app. However, Wells Fargo / WellsTrade has had several well-publicized data breaches over the last few years. Client information has been accidentally sent to unrelated recipients and account holders have been victims of successful malicious hackers as well. Although WellsTrade is a separate entity, the overlap with Wells Fargo and its chronic security and internal-controls problems should be a significant issue for any investor.
WellsTrade has $0 Stocks/ETFs (Excluding Penny Stocks) commissions. WellsTrade has an annual fee of $30 per household. WellsTrade also has a $95 outgoing account transfer fee and a $15 per hour, $5 per document account research and document retrieval fee.
Options and fixed income commissions are on the high end of average. For example, options traders will pay $5.95 plus $0.75 per contract, which is a dual-pricing scheme that is becoming rarer amongst discount brokers.
What You Need to Know
The best thing that we can recommend about WellsTrade is that it is integrated with Wells Fargo wealth-management services. Otherwise, the broker’s higher costs, limited tools, and lack of education are unlikely to be attractive to many investors. We remain concerned that Wells Fargo’s persistent security problems can affect WellsTrade customers in the future.
For fans of Wells Fargo’s analysis and research, we believe WellsTrade may have some value to offer. Unlike many other brokers in this market segment, Wells Fargo’s internal analysts provide buy-and-sell recommendations and detailed analysis that can be accessed on the WellsTrade platform. For the right investor, better-than-average research, good 24/7 telephone support, and integration with your Wells Fargo bank account may be worth the disadvantages.
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