In a survey that was replete with lots of "average," a handful of brokers strayed far from the pack, on the upside and the down.
In certain categories, the top and bottom players really outdid themselves. With some features, for example, the bottom-rated broker's score was so low, so far behind the next-worst even when possible statistical error was taken into account, that it merited a Stinker Award.
At the other end of the spectrum, in some features the top-rated broker's score was so far above the second-place performer's, even considering statistical variation, that it deserved a Bull Award. We examine many of these features more
closely elsewhere today, but category standouts, both good and bad, deserve special attention.
We're Worth It!
Sometimes brokers have decent explanations for their stinky performances.
gets a Stinker for its commissions, with a score of 2.6. But the broker asserts that customers get their money's worth with commissions starting at $29.95.
"We think that the value the customer gets with $29.95 is quite a value," says Martha Deevy, Schwab's senior vice president of electronic brokerage. "The number of customers coming to us shows that they recognize that value." Schwab's message seems to be, if you want cheaper commissions and fewer services, go to it.
Fend for Yourself!
Schwab's attitude is sensible enough concerning commissions, but when it comes to customer service, can a broker really justify poor performance?
, a subsidiary of
Quick & Reilly
, a unit of
, gets a Stinker for its trailing performance in that category. Suretrade, one of the smaller "League B" brokers we're writing about on Friday, had a score of 2.6. The broker explains, but doesn't really try to defend its customer service.
"There's a niche of customers out there that doesn't want telephone handholding. That's the customer that's most happy with Suretrade," says Don Montanaro, president of Suretrade. He adds: "We're turning our focus to look at customer-service issues. We'll be continuing to improve in that area." According to respondents, the firm has a long, long way to go.
Admitting the Problem is the First Step
Nothing excuses unreliability, and
gets a Stinker for its score of 2.7. After months of customer complaints, Ameritrade has grown accustomed to apologizing for its reliability problems. "We haven't done as well as we'd like and we know that," says Michael Anderson, president of Ameritrade's online brokerage. "We know we have some work to do."
Order confirmations are important to traders who anxiously wait to see if their orders make it through cyberspace. Unfortunately, Ameritrade distinguished itself on that score as well. It gets another Stinker: It scored 3.3
Ameritrade's rapid growth provides some explanation for its inability to keep up technologically, but neither its growth nor its tech trouble is new. The company continues to work to improve its reliability and order processing. But the question is whether users will be willing to wait for the much-needed improvements when customers at a host of other firms are much more satisfied.
On the upside, several firms stood statistically head and shoulders above the rest.
Like Child's Play
, a unit of
Donaldson Lufkin & Jenrette
, wins the trophy on the ease-of-use category, scoring a 4.6, a significant lead over the runner-up,
. It takes home the Bull.
"DLJDirect is simply accessible, fast and user-friendly," related
in his survey.
Almost half the DLJdirect customers who filled out the survey use the broker's proprietary software, which makes the trading experience even easier, says DLJdirect Chief Executive Blake Darcy. Benefits of the software include a cleaner interface than the Web site and faster downloading because the graphics are stored on people's PCs. The latest version of the software for Windows is now available.
Go for Broke
You want cheap trades? Take a look at
Brown & Co.
, a subsidiary of
, which aced the commissions test with a perfect 5 and takes home a Bull award.
"A $5 commission is the coolest! Why pay more?" asked
in her survey.
Brown's relatively small user base is uniformly enthusiastic about the broker's $5 market orders and $10 limit orders. Ironically, however, the service may be unavailable to the very people who value low commissions the most -- small investors. Brown has a policy of restricting new clients to those who demonstrate certain minimum income and asset levels and investment experience.
Our overall award winner, Datek, brings home the Bull for superior account administration and portfolio-tracking, scoring well above the masses with a solid 4.5.
"I appreciate the features Datek offers. Accounts are usually flawless relative to being up-to-date," wrote
in his survey.
While the category wasn't one that many respondents dwelled on, several made it clear that slow or inaccurate account updating made them see red. Slow account-opening could frustrate customers, too. So it serves Datek well that its customers are generally satisfied.
The technical side of this online brokers survey was conducted by
, October 1998.