Founded in 1973, Charles Schwab is a full-service brokerage with over $3 trillion in total client assets. As a low-cost leader offering $0 stock trades, Charles Schwab provides investors excellent stock research, quality trade tools, and professional planning for the future.
Top Takeaways for 2020
After spending five months testing 15 of the best online brokers for our 10th Annual Review, here are our top findings on Charles Schwab:
- As a full-service brokerage, Schwab has a fantastic, diverse offering of investments that will satisfy any investor. In our nationwide testing, we found Schwab’s phone service to be terrific.
- Alongside retirement, where Schwab is our top pick for IRA accounts, Schwab’s shining star is its offering of stock market research. Combined with an easy to use website, Schwab is also a winner for beginners.
- Schwab trading platforms and tools are robust and will satisfy the majority of traders, making it a respectable choice for day trading and options trading. That said, Schwab’s mobile trading app lacks real-time streaming quotes.
Overall Summary
| Feature | Charles Schwab |
|---|---|
| Overall | 4.5 Stars |
| Commissions & Fees | 4.5 Stars |
| Offering of Investments | 4.5 Stars |
| Platforms & Tools | 4.5 Stars |
| Research | 5 Stars |
| Education | 4.5 Stars |
| Mobile Trading | 4 Stars |
| Customer Service | 4.5 Stars |
| Ease of Use | 5 Stars |
Offering of Investments
Rank: 2nd (of 16)
Like other full-service brokers, Schwab delivers a complete suite of products and services. Charles Schwab provides everything from stocks (including fractional shares) and options trading to fixed income and retirement guidance. This includes every account type under the sun, including Individual, Joint, Traditional IRA, Roth IRA, Rollover IRA, Inherited IRA, Custodial IRA, 529 plans, charitable accounts, and even estate and trust accounts. The list goes on and on.
Retirement: For retirement, account services go beyond offering IRA accounts for self-direct investors. Customers can also elect to have their assets managed through Schwab’s robo-advisor service, Intelligent Portfolios. For personal advice, Intelligent Portfolios Premium provides clients unlimited one on one guidance from a Certified Financial Planner (CFP) for $30/month, after a $300 one-time planning fee. No question, Schwab ranks as our top broker for IRA accounts.
Commissions & Fees
At Schwab, stock and ETF trades are $0, and options trades are just $0.65 per contract. Even better for investors, Schwab is the only broker alongside Fidelity to list the price improvement received on eligible orders, which is important transparency for order execution quality.
Penny stocks: Our research found no additional fees or charges for penny stock trading, which includes OTCBB companies and stocks priced under $1 per share ().
Mutual funds: All transaction fee mutual funds cost $49.95 per trade. Note, unlike most brokers, Charles Schwab alongside Fidelity only charge for the original purchase. There is no additional charge for selling. For investors seeking No Transaction Fee (NTF) funds, Schwab offers clients access to its OneSource Funds. OneSource funds are NTF, No Load (NL) funds selected based on a variety of factors, the biggest being past performance.
Schwab pricing summary:
| Feature | Charles Schwab |
|---|---|
| Minimum Deposit | $0.00 |
| Stock Trade Fee (per trade) | $0.00 |
| ETF Trade Fee | $0.00 |
| Options Base Fee | $0.00 |
| Options Per Contract Fee | $0.65 |
| Mutual Fund Trade Fee | $49.95 |
| Broker Assisted Trades Fee | $25.00 |
| Commission-Free ETFs | all |
Research
Charles Schwab provides among the highest quality of research of all the brokers I’ve tested here at StockBrokers.com.
Market commentary: Schwab’s in-house research is terrific, thanks to its staff of experts, including Liz Ann Sonders, Randy Frederick, Lee Bohl, and Kathy Jones, among others. Additionally, market commentary found through the Schwab Insights portal is consistently fresh and engaging. As a cherry on top, Schwab delivers live daily broadcasting across 11 shows, a feat matched only by TD Ameritrade.
Stock research: Beyond offering traditional third-party ratings, Schwab’s proprietary equity ratings add value to the research experience.
ETFs and mutual funds research: Looking at researching ETFs and mutual funds with Charles Schwab, there is a lot to like. Thanks to third-party providers like Morningstar, Charles Schwab covers all the bases, including ratings, reports, and in-depth screening. Also unique to Schwab, using the new Beta Research experience, stocks, ETFs, and mutual funds can all be researched at the same time. Schwab’s new research portal quickly became one of my favorite new tools of 2019.
Schwab market research screenshots:
Trading Platforms & Tools
Alongside the Charles Schwab website, Schwab offers customers access to two primary platforms: StreetSmart Edge (desktop-based; active traders), and StreetSmart Central (web-based; futures trading). While each platform has its highlights and lowlights, all in all, Schwab will satisfy most traders.
StreetSmart Edge: Schwab’s flagship downloadable trading platform, StreetSmart Edge, provides most of the bells and whistles options traders and day traders need to succeed. I find the platform easier to learn than TD Ameritrade and TradeStation, although the latter two provide a richer experience overall. For options traders, Schwab’s All-in-one trade ticket, alongside the proprietary Walk Limit order type, are both excellent.
Trade Source: For casual investors seeking a simple tool that includes clean charting, streaming quotes, and purposely excludes all the bells and whistles desires by active traders, Trade Source is my recommendation. Trade Source is available to Schwab customers through the website and is essentially a standalone platform in its own right.
Futures trading: While futures trading is offered, trading must be conducted on the StreetSmart Central platform specifically. This means you cannot use the main Schwab website, nor StreetSmart Edge, to place futures trades.
Schwab trading platform screenshots:
Customer Service
To score Customer Service, StockBrokers.com partners with customer experience research group Confero to conduct phone tests from locations throughout the United States. For our 2020 Broker Review, 280 customer service tests were conducted over ten weeks.
Results
- Average Connection Time: <1 minute
- Average Net Promoter Score: 8.8 / 10
- Average Professionalism Score: 8.3 / 10
- Overall Score: 8.80 / 10
- Ranking: 5 th (14 brokers)
Mobile Trading
Charles Schwab provides a consistent and generally enjoyable experience for mobile trading, regardless of the device. That said, for active traders, Schwab’s mobile apps lack core functionality in two key areas: alerts and quotes.
Market research: Alongside offering full support for trading everything from stocks to mutual funds and complex options, Schwab does a great job with market research, which is thorough. For example, options traders will love the Idea Hub tool, which is unique to Schwab mobile and makes screening and then filtering through options trade ideas a breeze.
Active trading: Mobile app pros aside, the most significant area where Schwab needs to improve is with its use of market data. No stock price alerts can be set, stock quotes are in real-time but require manual refreshing, and watch lists auto refresh once every ten seconds. Comparatively speaking, Schwab’s competitors all offer real-time streaming quotes.
Schwab mobile app screenshots:
Banking
Among the bank and brokerage combinations in our annual review, Charles Schwab offers a full suite of services and competes with the best in the industry. With 357 service locations, Charles Schwab is a registered member of the Federal Deposit Insurance Corporation (FDIC), which insures bank deposits up to $250,000.
Loyalty rewards: The downside to banking with Charles Schwab is that the online brokerage offers no loyalty rewards for using multiple products. Loyalty rewards are where Bank of America Merrill Edge reigns supreme.
Education
Charles Schwab delivers a thorough educational experience that will satisfy beginners. Through Schwab’s Learning Center, all investing topics covered, from stock trading to retirement. At least 50 free webinars offered each month to current customers. Webinars are also archived for viewing on-demand. There is a lot to like.
That said, compared to education leader TD Ameritrade, the primary downside of the Schwab’s education offering is a lack of enhanced learning functionality. There is no progress tracking available to track what educational content you’ve completed or where you last left off. Also, no interactive learning tools, such as quizzes, are provided.
Final Thoughts
Charles Schwab is a respected worldwide brand with a terrific offering. Customers have access to a plethora of quality research and innovative trade tools, as well as $0 stock and ETF trades.
Beyond ranking as an industry leader for independent investing, investors interested in life planning and making the most of retirement will also find Schwab a great fit. In 2020, Schwab’s tagline holds true, “Own Your Tomorrow.”
About Charles Schwab
Headquartered in San Francisco, California, Charles Schwab was founded in 1971 and is one of the largest brokerage firms in the United States (1). As of July 2019, Charles Schwab is home to 11.9 million active brokerage accounts and $3.53 trillion in total client assets (2). Charles Schwab is also a significant player in the retirement space, and as of year-end 2018, it was the largest provider of custodial services for independent investment advisors (3).
Charles Schwab’s focus is seeing the world “Through Clients’ Eyes,” which means delivering products and services customers want and leading industry trends, instead of following them.