Here's Why I Don't Really Care About My Brokerage Firm

How big of a deal is picking the right brokerage firm? It depends on your investing habits. 

When it comes to certain financial products, I spend a ton of time researching all of my options to make sure I find the perfect one to meet my needs. This is true of credit cards, for example. I also put in the research when I was shopping around for a mortgage loan.

But, when it comes to my brokerage firm, I don't really care much at all which firm I invest with. In fact, I picked my broker solely because it provided me with an extra loyalty bonus with my credit card company and I didn't investigate its features at all.

Here's why picking a brokerage firm didn't matter to me. 

I have a very simple investment strategy

The biggest reason I do not care about picking the perfect broker is because I really need almost nothing from my brokerage firm due to the way I invest. 

I have almost all of my money in ETFs that track the performance of the S&P 500 and other financial indexes. Since these are basic investments, essentially every brokerage firm offers the ETFs I want. 

And since I'm not trying to time the market, research different investments, or trade stocks or options, I didn't need advanced screeners, research tools, earnings reports, investment news, charting options, or many of the other great features that more active traders can take advantage of. 

As long as the broker allowed me to make a simple commission-free purchase of ETFs I already knew I wanted, that was all I was really looking for. And pretty much every broker does that. 

I don't trade on margin

Another big reason why I don't care about my brokerage firm is because I don't trade on margin. If I did want to borrow against the money in my brokerage account to invest more, then I would need to research a brokerage firm that offered a favorable margin rate. But since this is not something I do, I have no idea what my broker's rules are for borrowing to invest. 

I only need basic account types

There's a third reason why my broker choice doesn’t matter. I only have a taxable brokerage account and basic IRA accounts. I’m not trying to do anything complicated like open a Solo 401(k) or a custodial account. The majority of brokers offer the kinds of accounts I need with no fees, so I don’t have to compare options to make sure I find what I want. 

What I need is safety and commission-free ETFs

The ultimate reason I don't care about my brokerage firm is because my needs are so basic that they could be fulfilled anywhere. I needed a safe brokerage firm, so as long as the one I found was SIPC insured and offered commission-free ETF trading, I was good to go. With every reliable brokerage meeting these criteria, it made sense to pick based on other factors rather than what the broker specifically had to offer.

Now, this is definitely not the case for everyone. If you want investment education, a wide range of different kinds of assets to invest in, and advanced research tools, you should take the time to find brokers that offer what you're looking for. There could be wide variation in these features. You'd want a feature-rich investing platform, and taking the time to find the right one would be well worth your efforts.