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Table of Contents
Introduction - Overview
Tutorial 1 - Intro to Investing
Tutorial 2 - Accounts & Margin
Tutorial 3 - Corporate Bonds
Tutorial 4 - Municipal Sec.
Tutorial 5 - US Gov. Sec.
Tutorial 6 - Investment Comp.
Tutorial 7 - Options
Tutorial 8 - Brokerage Firms
Tutorial 9 - Retirement
Tutorial 10 - Analysis
Tutorial 11 - Resources
SB Blog

Tutorial 8 - Brokerage Firms
Brokerage Firms

In tutorial 8, these are the topics we will discuss:

• Brokerage Firms
• TD Waterhouse
• Ameritrade
• JB Oxford
• Scottrade
• Etrade

Brokerage Firms

This section will help you find out where the best place is to open an account. We will compare brokerage firms for the best deals and outline the benefits and features of each.

We do not suggest using a full service brokerage firm because they simply charge too much in fees and commissions. We suggest learning as much about investing, so you can trade on your own with an online brokerage firm. Several of these firms such as Charles Schwab and TD Waterhouse actually have many resources to help you select investments without the high cost. If you are just starting out and simply need advice from a full service broker or advisor, select a firm and broker you are comfortable with. Check into their background, ask questions as if you were interviewing them for a job. Several large full service firms are:

Morgan Stanley
Edward Jones
AG Edwards
Merrill Lynch

Below, we have outlined the features and benefits of some of the best online brokerage firms that have lower fees and commissions.
The following information is often updated, but it is always subject to change.

TD Waterhouse is an excellent online brokerage firm. Online trading is easy and trade executions are fast. Pricing is in the middle, however, and they have several programs that give active traders further discounts on commissions if they meet certain levels.

Choice Program : If you have less then 18 trades per quarter and less than $250,000 in combined assets in your accounts, this is the program you would be eligible for. The option commission is $17.95 flat rate plus $1.75 per contract. So, if you traded 2 options, it would cost you $21.45. Market orders for stock trades is $17.95 and add $3 for limit or stop orders.

Premier Program : If you have more than 18 trades per quarter OR a minimum of $250,000 in assets in your accounts, you would be eligible for Premier. The option commissions are $12.00 flat rate plus $1.75 per contract. Market orders for stock are $12 with $3 added for limit and stop orders.

Premier Select : If you have 36-71 trades per quarter, you would be eligible for Premier Select. The option commissions are $9.95 flat rate plus $1.75 per contract. Market orders for stock are $9.95 with $3 added for limit and stop orders.

Premier Select Plus : If you have 72 trades or more per quarter, you would be eligible for Premier Select Plus. The commissions are the same as premier select.

You can also trade by touch tone phone for a higher rate, which is $35 for stock market orders and $35 flat rate plus $1.75 per contract for options and with an account officer by phone for $45 stock market orders and $45 flat rate plus $1.75 per contract for options.

TD Waterhouse's margin interest rates are as follows:

$1-$9,999 Broker call + 3.25%
$10,000-$24,999 Broker call + 2.75%
$25,000-$49,999 Broker call + 2.25%
$50,000-$249,999 Broker call + 1.75%
$250,000-$999,999 Broker call + 1.25%
$1,000,000 Plus Broker call + .75%

Broker call rate is updated and published in the Wall Street Journal every Tuesday.

A nice feature of TD Waterhouse is that they are one of the few online firms that also have branch offices. You can check and see if one of their 150 branches are near you by clicking this link and entering your zip code:

TD Waterhouse offers a very convenient way to transfer money into your brokerage account called Transfer Direct. You can transfer as little as $100 and as much as $100,000 daily from any financial institution including your other brokerage accounts, bank accounts, etc. right online. They also have e-services, where you can obtain your account statements and 1099's right online and the have a free direct download service that allows you to import all your financial data from TD Waterhouse into Quicken or Microsoft Money.

Securities in your TD Waterhouse account are protected up to 150 million per customer.
There is also no minimum deposit required when opening a new account.

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