Etrade Financial Reviews And Information

Etrade Financial was one of the first brokers to offer affordable trading on the Internet. At the time, the notion was revolutionary. The advent of etrade gave unprecedented access and control to individual investors with small accounts who wanted the freedom to manage their investments for themselves. They were one of the first to begin the steep decline in broker commissions and fees which had previously kept so many people from entering the markets through any vehicle other than mutual funds. Further, despite much nay-saying by the more established providers, Etrade quickly developed a reputation for reliable executions, reasonable service, and low prices.

Soon competitors started cropping up, however, and Etrade grew to the point where it found it difficult to continue competing on price, at least for accounts smaller than $50,000. Iinvestors with smaller accounts will find themselves saddled with higher commissions, and lots of hidden fees, including a $40/Quarter maintenance fee and a $40/Quarter inactivity fee.

Etrade has elected to compete in other ways, expanding into a wide variety of other services, including Etrade mortgage, Etrade money markets, and etrade loan services. Etrade bank offers a number of money management services, including online bill pay, free checking, debit cards, wire transfers, and tax planning services. The company has also opened up international branches such as Etrade Canada and Etrade Australia. Their aim is to bill themselves as a one-stop shop for financial services for the individual.

Unfortunately, Etrade's recent marketing campaigns have been so misleading that we can no longer recommend doing business with them.

Etrade Reviews in the Media

Etrade has received mixed reviews in the media, earning praise for the overall functionality of its website, but low marks for its sub-par customer service, slow phone response times, high hidden fees, low interest rates for savings accounts, and poor performance by its collection of no-load mutual funds. Further, as time has passed, its execution times have fallen behind those of some of its more nimble competitors.

Bottom Line

Etrade was at one time the best deal available to the individual investor. It was a pioneer in online trading, and made great contributions to the industry in the '90s. It is showing its age, now, and for most investors, there are better deals available for each of etrade's core offerings.

What concerned us the most, however was the misleading advertising practices Etrade has adopted recently. It has heavily promoted "trade for $6.99," never mentioning that in order to get that rate, you need to make 1500 trades per quarter. You read that right — one-thousand-five-hundred trades. That's an average of over 12 trades per day. Even their second-tier commission rate of $9.99 requires a $50,000 minimum balance. Otherwise you must pay their standard commission of $12.99, which is quite high by current standards for online discount brokers.

Even more worrisome is the fact that Etrade's many hidden fees, such as its $40 quarterly "account service fee," are buried in the fine print on a difficult-to-find page on their website. You can see the details here. Be sure to scan all the way to the bottom to get the whole picture.

It saddens us to say it, but our advice is to choose a different broker. Just compare Etrade with other brokers and you'll see why. Self-starters who want the lowest possible prices and don't need a lot of hand-holding from their brokerage should consider Zecco.com or TradeKing.com, instead. For investors wanting a broader array of services, Charles Schwab or Fidelity Investments are likely to be better alternatives.

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