When it comes to investing, a dependable stockbroker is one of the most important factors for success. Investors need an online broker they can trust to execute trades fast and reliably at the best price possible.
Investor's Business Daily conducted a survey with polling partner TechnoMetrica Market Intelligence to find out which are the Most Trusted Financial Companies. As part of the study, companies in six businesses, including online brokers, were analyzed, revealing the most trusted companies in each category.
Charles Schwab took first-place honors in the online brokers category, with an overall trust rating of 92.3. Based on participant responses, the IBD survey identified the six most important trust attributes and weighted them by importance to compute an overall Trust Index. The six trust traits are the quality of products and services, commitment to protecting privacy and security, ethical practices and values, fair pricing and fees, customer service, and customer treatment.
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Among online brokers, Schwab was followed by Fidelity and Vanguard. Just outside the three category winners was TD Ameritrade, ranking fourth. Schwab acquired TD Ameritrade on Oct. 6 2020 in a $22 billion all-stock transaction. The combined company has $6 trillion in client assets across 28 million brokerage accounts.
3 Most Trusted Online Brokers
| Company | Overall Trust Rating | Privacy | Quality | Ethics | Price | Customer Service | Customer Treatment |
|---|---|---|---|---|---|---|---|
| Charles Schwab | 92.3 | 95.4 | 91.1 | 93.3 | 92.4 | 89.8 | 91.4 |
| Fidelity | 91.2 | 94.4 | 91.5 | 91.4 | 90.1 | 88.4 | 90.1 |
| Vanguard Brokerage | 89.2 | 96.4 | 87.1 | 93.5 | 92.1 | 79.7 | 84.8 |
At that size, Schwab will rival Fidelity in terms of the number of brokerage accounts. But Fidelity remains the largest U.S. online brokerage in terms of client assets, and its popularity is helped by the strength of Fidelity mutual funds and ETFs.
Fidelity brokerage ranked No. 1 in this year's IBD Best Online Brokerage Awards. In fact, it has placed No. 1 in five of the past six years. The 2020 rankings are based on two surveys of more than 5,000 investors combined and included an analysis of 10 online brokers. Schwab was No. 2 in this year's Best Online Brokerage Awards, but was No. 1 last year.
Online brokers have moved to commission-free pricing on many of their products and services over the past year. Transparency, data protection and customer service have become important differentiators in the industry.
Schwab says building customer trust is embedded in every aspect of its business.
Building Trust Is Key For Schwab
Schwab CEO Walt Bettinger says the firm aims to deliver "a winning combination of low costs, great service, industry-leading technology, and guaranteed satisfaction across every phase of our clients' financial journey. In every decision and every action — whether it's how we empower people financially, protect client assets, or create a simple and easy client experience — we always strive to make decisions that best serve our clients."
In the trust survey, Schwab was the leader among online brokers in terms of fair pricing and fees, and customer service and treatment, while Vanguard was the leader in customer privacy and security and on ethics and values. Fidelity was the leader in the quality of its products and services.
To be included in the survey analysis, at least 100 of a brokers' clients had to rate the company on the trust attributes. Other online brokers included in the survey were No. 5 E-Trade/Capital One Investing/ShareBuilder, No. 6 Merrill Edge, No. 7 Interactive Brokers and No. 8 Robinhood.
This article was originally published on Oct. 12, 2020, and was updated on June 9, 2021.
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