After a year of cutting prices, expanding advisory services and launching trading platforms with new capabilities, Charles Schwab (SCHW) turned in a strong showing in the latest IBD Best Online Brokers survey and remained among the five best brokers.
IBD's sixth online brokers survey, like the previous ones, asked investors which broker features are most important to them and whether their primary broker did a good job in each of those categories. Schwab brokerage again showed strength across the board, ranking among the best brokers in every category this year.
In the crucial Low Commissions & Fees category — the most important attribute to brokerage customers in the survey and the No. 1 reason they switched firms — Schwab answered investors' call.
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Amid a price war among brokerage firms in online trade commissions, Schwab lowered its fees for U.S. stocks and ETFs to $4.95, down from $8.95 the prior year. The result? Schwab's Customer Experience Index rating for Low Commissions & Fees jumped sharply from last year's survey.
Meanwhile, in early 2017, Schwab brokerage customers gained access to the new Schwab Intelligent Advisory, an advisory service that blends trained professionals and advanced technology to make investment planning more accessible. The service comes with an annual advisory fee of 0.28% of assets.
The advisory service is designed for investors who are focused on keeping costs low and understand the importance of developing a personalized financial plan.
Also on the cost side, Charles Schwab ranked No. 2 in the Low-Cost/Free ETF Trading category. Schwab's ETF OneSource — the firm's commission-free ETF platform — has expanded to 254 funds after an addition of 12 ETFs in early 2018. That helps address an investor need that Charles Schwab perceived, says Heather Fischer, vice president of ETF and mutual fund platforms and client solutions strategy.
"Trading ETFs without commissions or other fees continues to grow in importance for investors," Fischer said.
Charles Schwab Tools And Service
The ability to place trades quickly and reliably is an important quality, according to investors. So is Site Performance. Within those two categories, Schwab brokerage has consistently performed well.
Within the Equity Trading Tools category, Schwab also continued to see strong ratings. In Q4 2017, Charles Schwab launched its new web trading program called StreetSmart Central.
Meanwhile, in Customer Service, the company again earned superior scores from Schwab brokerage customers. Charles Schwab has taken a unique step in addressing customer satisfaction. In February 2017, the company announced a Satisfaction Guarantee for clients that will refund any related commission, transaction fee or advisory program fee if a Schwab client is not completely satisfied.
According to Charles Schwab President and CEO Walt Bettinger, "Today's consumers expect great value, a great experience, and a refund if they aren't satisfied. We believe a modern investing experience should deliver on these expectations — period."
Investment research remains a focal point at the Schwab brokerage firm, and its results in the rankings reflect that effort. Charles Schwab ranked among the best brokers in Research Tools, Investment Research and Trade Ideas.
Schwab Brokerage Account Platforms
In two other categories, Options Trading Platform and Mobile Trading Platforms, Schwab is working to improve its customer experience.
In late 2017, Charles Schwab released its new trading platforms StreetSmart Central and StreetSmart Mobile that integrate its optionsXpress service to "build a world-class derivatives trading experience for our clients," said Barry Metzger, senior vice president of trading services.
Check back next year to see if the new services boost ratings from Schwab brokerage clients in these categories.
For 2018, Charles Schwab intends to continue to provide low-cost offerings that deliver high-quality solutions to clients, like the Schwab Intelligent Advisory service.
"Our focus is to provide investors with a more modern approach to investing, planning and managing their wealth than what most other firms currently offer," said Michael Cianfrocca, Schwab managing director of corporate communications.