How To Choose An Online Brokerage Firm

FREE Tips for Choosing an Online Broker

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Rule #1: Always Have More Than One Account!

Brokers want all your money, but don't do it. Split your money between at least two different firms.

There are many advantages to having more than one trading account.  Each firm offers different benefits that go beyond the basic trading software.  For example, some firms offer monthly magazines with helpful investment advice while others offer financial education and trading seminars.  You should seek as much financial knowledge as possible and brokerage firms tend to provide lots of free (& some paid) financial education for their customers.

Additionally, emotions tend to be a bad thing when it comes to making financial decisions. By having more than one account, you're less likely to become emotionally tied to only one firm.  If you find one firm isn't right for you, you won't be afraid to switch firms.

The amount you deposit with each firm will depend on how you intend to use them.  You might use one account for shorter-term investments and one for longer-term investments just as many people have one bank checking account & a separate savings account.  In this case, you'll allocate your money according to your trading strategy.  If you've opened one account primarily to get access to education or tools, then just deposit the minimum amount of money to keep the account open (often $2,000) and leave it in cash or invest it in a broad-based index so you don't feel the need to actively check or manage that account.