Hey all,
I want to roll a 401(k) into Roth and traditional IRAs and I'm thinking about trying Zecco as an online brokerage. They advertise 10 free trades/month for accounts over $2500. Has anybody here tried them? What's the catch on their cost? How do they make their money? They don't seem to have a lot of advertising, but maybe that changes after you open an account?
Thanks!
-Will
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The young fellow over at MyMoneyBlog has switched to Zecco and seems pretty happy about it - for the things for which it seems best suited - ie. it's not for everyone for everything. He did a two-part review back in May '07 and has several followups about it. Go to
It would help the discussion, I think, if you could describe a bit more about how you plan on actually using the account(s) in question.
That MyMoneyBlog fellow has review (and screenshots) from several other ultra-low-cost brokerages.
FWIW, I've been generally pretty happy with my ETrade account, too. They have cheaper non-NTF fund fees, and their commissiosn are a little cheaper than Fido. Their online savings and checking bank accounts are quite good. But, while I'm not seriously concerned about ETrade's future as a going concern (they are suffering badly under the subprime mortgage situation), I am a little concerned that they may be acquired by another broker or otherwise go through some near-term changes - none of which are likely to cost us anything, but which may present some small inconveniences until it's all resolved.
If you have a reasonable amount of money to invest, Wells Fargo is another option. When you open a brokerage account and what they call a PMA checking account and link the two, you get 100 free trades per year. The trades include equities and no-load mutual funds.
A "year" is based on the date you open the account, so another 100 every anniversary. This has the advantage of giving you a bunch up front if you need to build the initial portfolio versus the 10 per month, although fewer overall.
The catch is that the PMA account has a $25 a month fee. That would wipe some of the advantage of free trades, but if you have $25,000 in qualifying assets, the fee is waived. Qualifying assets include cash in the PMA, everything in the brokerage account, any IRAs, and 10% of mortgage balance if your loan is with them.
A slight annoyance with Wells Fargo is that they haven't fully embraced the online way of doing business. For instance, when funding the brokerage account with an ACH, they wanted mailed-in proof of account ownership via a canceled check. You might as well just fund with a check. They also have forms (like backup witholding) that are need to be physically signed and returned, although you can download the form and fax it back in. Some may view this as a positive thing.
Brian
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