In American society today, it's often not considered polite for people to discuss their financial affairs freely with each other. Instead, we're left to mostly worry on our own, possibly assuming that everyone else is doing better than we are.
But if we really knew more about others, we might learn that the guy with the Lexus and the fancy house is actually up to his eyeballs in credit card debt -- and might be living above a convenience store in a few years.
Often, answers to simple questions would be very welcome. For example, if you're shopping for a new brokerage, you can definitely do your own research online, check out various top contenders, and make a smart decision. (We hope you'll check out our Broker Center, too. We offer guidance on how to find the best brokerage for yourself, along with a handy comparison chart.) Still, wouldn't it be helpful or reassuring to hear which brokerages other financially savvy people use?
Enter the Fool's Living Below Your Means discussion board, where someone recently asked that very question. You can read the entire discussion, but I'll offer some highlights below:
• IndecisiveFool: "I've been satisfied with Scottrade. Trades cost $7, which are low but not the lowest. There is a local office nearby if I have any problems. I have not had any problems yet. There are no annual account fees."
• DEGbookworm: "I have E*Trade (Nasdaq: ETFC ) . I don't think they're the cheapest, but changing is such a [pain in the @No. %], and the cost difference among the discount brokers isn't much. If you have at least one trade per quarter there are no account maintenance fees. I've been happy with the ease of its website, and it's been easy to transfer money from my bank into it."
• 2gifts: "I have accounts at TD AMERITRADE (Nasdaq: AMTD ) , E*Trade, and Scottrade. I have had nothing but problems with TD Ameritrade, and will be moving the big account out of there... I find their interface to be terrible, and I don't like the fact that information is not readily available." [For the record, I use TD Ameritrade myself and have had few problems.]
• davekone: "I went with E*Trade because they would automatically reinvest dividend payouts for free. Good interface as well. I have gotten great phone support when needed." [Note that more brokerages are adding dividend reinvestment availability lately, so don't assume that your brokerage or another doesn't offer it. Ask.]
• FreeCashFlow0714: "I have an account at Muriel Siebert. It's great for inactive traders like me (only two trades in two years, and these were purchases of real one-decision stocks -- Berkshire Hathaway (NYSE: BRK-A ) and Wesco Financial (NYSE: WSC ) ) because there are NO mandatory fees (like the annual and quarterly fees of other firms) and NO inactive account fees..."
• Stevenjklein: "I chose Scottrade because I trade infrequently and (unlike some other brokers) they don't charge inactivity fees."
• Kaudrey: "I have mine at Schwab (Nasdaq: SCHW ) . $12.95 a trade for stocks. No account fees, you can buy CDs through them if you want, etc..."
• Levka98: "I use Vanguard. They mail verification statements after each transaction. They have good tools for researching stocks. My tax preparer appreciates their year-end statement."
• Joelxwil: "Whoever you go with, make sure that they will protect and make you whole in the case of somebody hacking into your account. TDAmeritrade will do that, and so will others, but I do not have a list." (I wrote about this recently, and it's a good item to add to your checklist.)
• Jnjmom: "I use Sharebuilder. I am not interested in trading -- I am looking to build up a big pile of stocks over time. There is a monthly fee, and then you can make a number of stock purchases each month. (The higher the fee, the more buys you can make) ... We are dollar-cost averaging into an S&P fund and into a handful of individual stocks each month, and dividends are reinvested for free. The amount I purchase each month keeps my cost at less than 1% of my investment." (Sharebuilder offers commissions as low as $4 per trade.)
There you have it -- lots of opinions and perspectives. In some senses, there aren't major differences between many major contenders. They tend to offer relatively low commissions (between $5 and $20 or so per trade), broad ranges of mutual funds, stock research, and more. But there still are some meaningful differences. You may really want a local office, for example -- if so, some contenders have none. You may do a lot of mutual fund investing and find that one brokerage offers more than 1,000 funds, while another sports access to just 100. If you trade a lot, the commission will be more important to you. If you want the hefty dividends you're receiving from Altria (NYSE: MO ) and Bristol Myers-Squibb (NYSE: BMY ) (recently 4.9% and 4.1%, respectively) to be reinvested for free, make sure you can get that. Basically, look into the factors that matter most to you.
Find the best brokerage
Odds are, you can find a better brokerage for yourself -- one that charges you less than you're paying or that offers the services or protections you want. Take a look at our Broker Center to learn more, along with reading this article on finding the right brokerage. Indeed, some very reputable brokerages now charge commissions of $5 or less per trade. (Our comparison table may be particularly helpful.)
Longtime Fool contributor Selena Maranjian owns shares of Berkshire Hathaway, which is an Inside Value recommendation. The Fool has a disclosure policy.