E*trade Sucks (and Ameritrade too)

Trevor — Thu, 21 Jan 2010 22:58:28 +0000

The Sanmina-SCI stock I foolishly purchased through their Employee Stock Purchase Program is currently trading at a third of its purchase price. Now, to add insult to injury, I see that E*trade (the broker Sanmina used for the ESPP) charged me $20 for the 6:1 reverse split last August. They call it a “mandatory reorganization fee” and claim that it’s standard practice to charge this fee. Yet, Fidelity, Scottrade, and USAA, to name a few, don’t seem to agree, as they do not charge this fee. E*trade customer service, both email and phone, refuses to reverse the charge, so it is now my moral imperative to liquidate and close the account. I’ll never use E*trade again, and hope that others will heed this warning as well. Avoid Ameritrade too, which also charges this fee.

According to Kiplinger’s November 2008 report, Fidelity wins as best overall online brokerage, combining tools, research, large selection of funds and bonds, and relatively low fees. Most importantly, they don’t charge for mandatory reorganizations.

Anointing the best broker is tricky because so much depends on the needs and wants of customers. Investors who feel they need a lot of hand-holding may gravitate toward Fidelity and Charles Schwab, which run neck and neck in the race to provide customers with all the advantages of a full-service broker at a discounter’s price. Investors who are willing to settle for fewer bells and whistles will appreciate Muriel Siebert, a small firm that stands out for its selection of mutual funds and third-party research. Price-conscious customers might favor TradeKing and newcomer Options-House, which charge low commissions — $4.95 per stock trade, regardless of the account size — and provide good customer service.

All Things Scurrilous » Financial

E*trade Sucks (and Ameritrade too)