Wells Fargo’s brokerage, WellsTrade, is intended to serve Wells Fargo Bank customers who want the convenience of managing their investments at the same institution where they have checking accounts and mortgages. WellsTrade was late to the zero commission pricing movement but finally joined the pack in December 2019, dropping commissions for listed stocks and ETFs to $0.
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 costs and high-quality tools will be disappointed.
- Best for existing Wells Fargo Bank customers.
- Zero-commission trades for listed stocks and ETFs. Penny stocks incur a commission.
- Access to Wells Fargo research.
- All Wells Fargo accounts are linked on the website and app.
Who This Broker is For
WellsTrade is designed for infrequent, buy-and-hold investors who are not particularly interested in asset classes besides equities. WellsTrade clients can trade stocks, ETFs, mutual funds, fixed income, and single-leg options. It’s a fit for you if you’re a U.S. resident with other financial relationships with parent bank Wells Fargo. One advantage to having an investing account if you’re already doing business with Wells Fargo is that moving money from one account to another is extremely simple.
No commissions for stock and ETF trades
Easy-to-use website and mobile app
A single app gives you access to all Wells Fargo accounts
Limited research offerings outside of proprietary Wells Fargo analysis
Households with under $250,000 in WellsTrade accounts may pay a $30 annual fee
Quotes do not stream
- WellsTrade joined the zero-commission movement for U.S.-based online brokers in early 2020 for stocks and ETFs only.
- Both the website and the mobile apps have simple layouts and appear very similar, so there’s no jarring transition from one to the other.
- You can manage all of your Wells Fargo accounts from a single website or app.
- Though the Wells Fargo proprietary research offerings are worth considering, there is very little else available. Screeners are limited and there is no options analysis at all.
- The $30 annual fee applies to households with less than $250,000 in WellsTrade accounts. You can bypass the fee by enrolling all accounts in electronic delivery of statements and confirmations, or by linking to the Portfolio by Wells Fargo program.
- Streaming real-time quotes are not available. When you first bring up a quote, it is displayed in real-time, but you have to refresh the page to update the quote.
Getting started with a new account is relatively simple. New customers can quickly sign up for a new account on the WellsTrade website or mobile app and most can provide their signatures electronically. You may have to print out some forms and mail them in, which will delay the opening of your account. If you already have a relationship with Wells Fargo, personal details are automatically filled in on your application. There are a few additional hoops through which to jump to receive options and margin approval. One upside to using a bank-based online broker is the incredible ease of moving cash from one account to another, both on the browser and mobile app.
The web-based platform is easy to navigate but it’s very slow. Most of the account functions, research tools, and order entry can be found under two-level menus. Upon logging in, the first page you see is an overview of all your brokerage accounts with balances and a chart displaying your asset allocation. Customization is limited to setting up account groups and to changing out the data displayed on your portfolio listing.
Order tickets are not ubiquitous; you will have to make a few clicks or taps on the menus to open one. The mobile app is essentially the same experience as the web version, scaled to fit the device.
Investors can enter orders for stocks, single-leg options, ETFs, and mutual funds very easily. WellsTrade does not offer conditional order types such as one-triggers-another, 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. One nice touch is that investors can make tax lot choices while entering an order.
Only single-leg option orders can be made online. When opening a long stock position, you’ll have to make a separate transaction to create a covered call or protective put. If you’re a regular spread trader, this is not the broker for you as you will have to call a broker to make those trades as a single order. There is a $25 additional fee to place an order through a live broker.
Mobile Trade Experience
Placing a trade on a mobile device is very similar to the web order entry experience. To easily close a position and avoid making errors, it’s best (especially on mobile) to start from your Positions page and then tap on the Trade link.
Range of Offerings
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.
- Stocks long and short
- OTCBB (pink sheets)
- Mutual funds (~4,000 total, ~2,000 no-transaction-fee)
- Bonds (secondary market in corporates, treasuries, munis, and CDs)
- Single-leg options (limited number of spreads available via live broker)
- Robo-advisory, Intuitive Investor, integrated into website and app
WellsTrade clients can place market, limit, or stop-limit orders online. There are no conditional orders available. Market-on-open and market-on-close orders can be placed with a live broker only.
WellsTrade does not publish information about how orders are routed. The firm does not characterize its order router as a “smart” router but manages to attain approximately $0.01 per share in price improvement on equity orders. WellsTrade does not accept payment for order flow for marketable equity orders. The firm receives $0.15 per contract in payment for order flow on options orders, which is below the industry average.
WellsTrade’s commissions are mostly in line with the rest of the industry. There are two notable exceptions: the high fee for trading penny stocks and the base fee for trading options.
- Cost to open or close an order of 1 share priced at $1 or greater is $0. Cost to open or close 1000 shares is $0.
- Cost to open or close any trade of a stock or ETF priced less than $1 per share is the greater of $34.95 or 3.5% of principal.
- Options base commission to open and close is $5.95.
- Options per contract fee is $0.75.
- Fee for 50 contracts is $43.45.
- Covered call trade of 500 shares plus 5 contracts is $9.70 and is two separate transactions.
- Options exercise/assignment fee is $25 and must be done via live broker.
- Mutual fund fees for those not on no-transaction-fee list is $35.
- Margin interest at $10,000 balance is 9%. $100,000 balance is 7.5%. These fees are above the industry average.
- Inactivity fee is $30 per year for households with balances below $250,000.
- No account closure fee. Termination fee for IRAs if account holder is younger than 70 ½ is $95.
- Account transfer fee is $95.
- Wire fees are $30 domestic, $40 international.
- Check fees are $0 unless overnight delivery is requested, then fee is $15.
- Paper trade confirmations or account statements are $20.
- Live broker fee is $25 in addition to online fees.
How This Broker Makes Money From You and for You
The pressure of zero fees has changed the business model for most online brokers. In lieu of commissions, the way brokers make money from you is less obvious—as are some of the subtle ways they make money for you.
- Interest on cash balances: WellsTrade clients are automatically enrolled in cash sweep programs, but at present, the interest earned is a paltry 0.01%. Clients are encouraged to open a Wells Fargo Bank account and move uninvested cash to an interest-earning account, or manually move cash into a money market fund. WellsTrade makes money from the difference between what you are paid on your idle cash and what they can earn on customer cash balances.
- Stock program: WellsTrade earns revenue loaning stocks in your account for short sales but does not share that revenue with you.
- Payment for order flow: WellsTrade accepts payment for order flow (PFOF) on options orders, but not on marketable stock and ETF orders. This is the practice where a broker accepts payment from a market maker for letting that market maker execute the order.
- Price improvement: WellsTrade did not disclose its price improvement statistics.
- Portfolio margining: WellsTrade clients cannot apply for portfolio margining, which can lower the amount of margin needed based on the overall risk calculated.
- WellsTrade does not offer portfolio margining.
- WellsTrade does not have a stock loan program.
- To earn interest on cash, clients must manually move money into a bank or money market account, which pays 0.05-0.89% interest.
- You can enroll in DRIP (dividend reinvestment) plans.
The landing page for asset screening lets you look for stocks, ETFs, mutual funds, and bonds. You can search the mutual fund list for socially-responsible investments, but not stocks or ETFs. WellsTrade offers a recommended list for mutual funds that is updated regularly. The bond screener allows you to search through the available inventory for a bond that fits your specific needs, but trades must be made with a live broker.
The screening tools at WellsTrade are fairly standard, albeit basic, compared to others in the industry. Though limited in functionality, it is convenient to be able to create a trade ticket from the search results list. When you find a stock or ETF you want to learn more about, the detailed information is presented as an overlay to the page you’re viewing, so when you close the overlay you’re back where you started. Options chains are shown on a detail page, but there is no options screener.
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. You can follow a specific Wells Fargo analyst if you find one that fits your investing profile.
The WellsTrade portfolio analysis tools are surprisingly robust. Investors can see charts, wheels, and tables that break down the holdings in their portfolio by asset class. Performance reports are easy to access and very detailed and can be customized to show a particular period. The account landing page upon login presents a view of the entire household, which can be customized as desired. The portfolio listing can be customized as well, and you can define up to five different views. Additional detail is provided as you drill down, and can go to the individual transaction level.
The asset allocation wheel lets you compare your portfolio to a variety of asset allocation models. There’s a to-do list available that tells you what transactions you’d have to make to match your desired allocation model.
There are some portfolio analysis tools missing, though. You cannot consolidate accounts from other financial providers to give you a more complete picture of your household's assets. WellsTrade customers cannot estimate the tax impact of a proposed trade, and there are no tax reporting tools. The platform also lacks a trading journal.
The education tools are light to nonexistent, outside of FAQ pages and other brief snippets.There are no videos at all, and the articles are short and lacking detail. New investors who struggle with basic investing concepts won’t find much help. There’s little help for navigating the WellsTrade platform and tools. For example, investors with limited experience screening for stocks are unlikely to be able to navigate the screening tools on their own.
There are life planning tools on the Wells Fargo Advisors site that cover topics such as marriage, job changes, and divorce. The Retirement Center includes tips for planning for retirement as well as living in retirement. There is some accompanying educational content included with the retirement planning tool, but it lacked any real depth. The focus of WellsTrade seems to be mostly on clients who rely on an advisor to help them with their questions.
- Phone line available 24/7.
- No online chat capabilities.
- Live brokers are available during market hours.
- Clients are strongly encouraged to work with a financial advisor.
- Wells Fargo accepts only U.S. residents and citizens as clients.
- 2-Step Verification at sign-on lets you activate an additional layer of security when you access your accounts online by entering a unique Advanced Access verification code sent to your mobile device or phone, or from an RSA SecurID device.
- Biometric entry enabled for mobile apps.
- Excess SIPC insurance carried by London Underwriters up to a firm aggregate limit of $1 billion (including up to $1.9 million for cash per client).
- Wells Fargo / WellsTrade has had several well-publicized data breaches over the last few years, though none recently.
WellsTrade is tightly integrated with Wells Fargo banking and wealth-management services, and if that’s of value to you, you might consider opening an account here. Otherwise, the broker’s limited tools and lack of education are unlikely to be attractive to many investors. Wells Fargo’s persistent security problems, which have appeared to be under control during the last year or so, may affect WellsTrade customers in the future.
WellsTrade may have some value to offer if you’re a fan of Wells Fargo’s analysis and research. The firm’s internal analysts provide buy-and-sell recommendations and detailed analysis that can be accessed on the WellsTrade platform, which is not the norm in the self-directed trading space. For the right investor, better-than-average research, good telephone support, and integration with your Wells Fargo bank account may be worth the disadvantages.
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