March1,2021 BARRON’S 29
Ameritrade’s justly cele-
brated active trading plat-
form, which could make
the combination of the two
brokerages a tough act to
beat.
4. E*Trade/4stars
That E*Trade dropped in
the rankings by one position
this year is more a function
of a change in weightings
and improvements by other
brokers than a reflection of
platform slippage. Its mobile
app continues to top the
charts—it was best for mo-
bile trading—and E*Trade
has done a fine job of beefing
up research.
5. Charles
Schwab/4stars
Charles Schwab remains
a solid bet for many self-
directed investors, with
phenomenal customer ser-
vice, an abundant informa-
tion-guidance system, and
lots of investment tools.
Over the past few years, it
has made substantial im-
provements on site appeal
and customization, and its
mobile phone platform is
now comparable to others.
6. tastyworks/
3.5 stars
The big news for tastyworks
is a new owner, the U.K.-
based IG Group. Tastyworks
says it’s going global, which
should widen an audience of
devotees who swear by the
technologically stunning
options and futures trading
platform and quirky original
content and live broadcasts.
Tastyworks, however, isn’t
necessarily right for those
interested in investing in
mutual funds, exchange-
traded funds, or even stocks.
6. Merrill Edge /
3.5 stars
Merrill Edge may not have
climbed from last year, but
its total score showed the
most improvement. That,
in part, reflects continued
strengthening of its informa-
tion-related offerings,
wrapped in the most visu-
ally pleasing graphics and
approachable presentation
out there. Its platform is
recommended for occasional
traders, especially ones
focused on dividends and
retirement; it came in best
for retirement investors. The
active trading platform, by
contrast, is average at best.
8. SogoTrade/
2.5 stars
SogoTrade appeals to an
overseas Chinese market,
with support designed for
those customers as well
as cryptocurrency traders.
It’s not designed as a main-
stream, full-service broker-
age and shouldn’t be ap-
proached as one. It is
attempting to attract a youn-
ger clientele and cash in on
the zero-commission envi-
ronment by offering a rebate
on certain limit order trades,
which is a gimmicky way
for customers to feel better
about the broker being paid
for order flow.
9. TradeStation/
2.5 stars
TradeStation is another
niche, active-trading plat-
form and another operation
that interests the crypto
crowd. Many trading opera-
tions embrace the company’s
proprietary application pro-
gramming interface, or API.
But for other mainstream
investors, TradeStationlacks
the necessary foundation
and appropriate tools and
information for decision-
making.
10. Ally Invest/
2.5 stars
Ally Invest must offer a lot
more if it wants to attract
more than just Ally Bank
clients looking for a conve-
nient investment site. Its
investment site is clean and
well ordered. But it lacks the
sophistication, features, and
flexibility of its competitors.
11. TradingBlock/
2.5 stars
TradingBlock is a work in
progress. It released a new
active trading platform in
2020, which, true to its
name, builds on a series of
block-like components that
can be easily shifted, manip-
ulated, and highlighted. It’s a
highly effective, practical
approach, but there’s a lot
that still needs to be done,
including a dedicated mobile
app. The brokerage said that
events of last year slowed
down the release of the app
and other improvements,
which are coming.
Robinhood
We gave Robinhood the
same scrutiny as the broker-
ages in our survey. We sent
the firm our questions, and
we did a thorough analysis
of its platform. Here are our
takeaways:
Robinhood makes it very
easy to trade. Just swipe and
you’re done. The Robinhood
app emphasizes fractional-
shares trading and high-
lights dollar amounts, en-
abling investments for as
little as $1. The default is a
market order. While it’s pos-
sible to trade in shares and
at limit or stop orders, that
takes some poking around.
Robinhood excels in pre-
sentation. Its app is clean,
well lit, and orderly, as is its
lesser-known website. But
minimalist architecture has
drawbacks. We believe that
nowadays, self-directed in-
vestors need tools and infor-
mation necessary to make
informed decisions.
Robinhood lacks that
firepower. Research is ex-
tremely limited, although
the brokerage offers better
ordered and slightly more
thorough analysis with a
$5-a-month gold member-
ship.
Its education platform,
Robinhood Learn, starts
with the basics—“What is an
investment?” or “What is the
stock market?”—but doesn’t
get much deeper than that.
Its RobinhoodSnacks daily
podcasts and newsfeed are
entertaining, but not very
insightful for even slightly
experienced traders. Ad-
vanced trading tools? Not
really.
Our conclusion? If you’re
serious about investing,
Robinhood isn’t for you. If
you want something that
resembles sports betting and
you have some cash to burn,
that’s another story.—M.M.
How We Ranked the Best Online Brokers
For 2021, we retained our usual six categories, but expanded the
subcategories to more accurately reflect particular online platform
strengths and weaknesses. We also sharpened the weightings. The
six categories are trading, usage, research/education/news, mobile,
international, and retirement/dividends. We used a point system to-
taling 200 that’s weighted as follows: trading (25%, or 50 possible
points); usage and research/education/news (22.5% each or 45 pos-
sible points each); mobile (20%, or 40 possible points); international
and retirement/dividends (5% each or 10 points each). This year, we
increased weighting of research/education/news, and reduced mo-
bile and, to a lesser extent, usage. These changes reflect an added
emphasis on providing knowledge necessary to invest better, faster,
and wiser, in addition to providing software tools that filter this infor-
mation. Mobile, on the other hand, has come of age at online brokerages.
Most offer mobile features that replicate the desktop or web. We in-
creased the number of subcategories by 20, to 98. We weighted each
subcategory; they ranged from one to four and, in rare cases, five points.
Some are either/or: A brokerage either provides for paper, or hypotheti-
cal, trading, or it doesn’t. Some are relative, such as options margin rates
or fee structures. In some categories, we gave high marks for functional-
ity; in others, for technical prowess. We also rewarded novel features or
services. A platform that offers feeds, say, from six independent news
providers received more points than a platform with just two. A site
that enables users to choose newsfeeds earned an additional point, and
sites that automatically display stories related to a portfolio or watch list
received more than those that force users to search.—M.M.