Consumer Reports Gives High Grades to Low-Cost Brokers

This report is from Consumer Reports:

"Discount brokers did a better job shepherding clients through the stock market upheaval of the past year than traditional investment banks, according to Consumer Reports survey of the most satisfying brokerage firm services.

Topping the list in overall satisfaction was USAA, available only to current and former military personnel and their families. USAA earned high marks for account service, Web site ease of use, transactions and phone services. Vanguard followed closely in the Ratings and Edward Jones had high marks for phone services.

Consumer Reports National Research Center surveyed almost 9,000 online subscribers asking them about their experiences with their brokerage firms regarding several services including transactions and general customer service, Web site ease of use, online transactions and their instances of problems with phone and personal service between January 2008 and 2009.

Rounding out the list of brokerage firms that respondents found to provide high scores for services were Schwab, Scottrade, Fidelity, TD Ameritrade, and T. Rowe Price. Though half of survey respondents said their investment portfolios plummeted, most respondents were relatively happy with the level of service and advice they received.

However, bigger brokerages, such as Merrill Lynch and Ameriprise, placed lower in the Ratings earning below average scores for their Web sites. Ameriprise also received relatively low marks for phone service. The survey revealed some additional complaints, even among discount brokers. E-Trade clients reported a higher number of phone-service problems and said they were unable to find information on the company’s Web site 35 percent of the time.

E-Trade, Scottrade, and TD Ameritrade were among the lower-rated companies for financial advice, which is not surprising because they are bare-bones discounters. Unexpected fees continue to irk clients, about 4 percent said they were hit with unexpected fees. Banc of America clients reported the most, with 11 percent saying they were charged unexpected fees. For more information on the survey and complete broker service ratings check out Consumer Reports May issue or visit www.ConsumerReports.org starting May 6, 2009. "

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