For the 12th consecutive year, Investor's Business Daily and TechnoMetrica Market Intelligence joined forces on our annual online broker comparison study measuring investor sentiment toward brokers' performance in various critical service areas.
Since 2012, the IBD survey has asked investors to rate their primary online broker based on the most important and desirable broker attributes.
Using the individual ratings given to each attribute, we calculate an overall customer experience index score for each broker. This score is the basis for the Best Online Brokers rankings.
Read Our Full Special Report On Best Online Brokers For 2024
This year's online broker comparison survey follows the two-phase methodology employed in previous years. Both phases use online surveys to collect data.
We started the research with a total of 25 attributes in Phase 1. The objective of Phase 1 was to determine which features and services offered by online brokers were most important to investors.
Two Phases Of Online Broker Research
From Aug. 31 to Oct. 23, 2023, we conducted an online survey of 501 visitors to IBD's Investors.com website and the research panel of IBD's sister publication Barron's to test the 25 attributes for potential inclusion in Phase 2 of the online broker study.
We used the Maxdiff trade-off technique in Phase 1 to select the characteristics for inclusion in Phase 2. The Phase 1 survey presented each respondent with 10 sets of attributes; each set included five randomly chosen characteristics from the potential pool of 25. Respondents identified the most and least important features in each set.
Using the results of the Phase 1 survey, we reduced the 25 attributes to 20. Phase 1 also helped us assign the weights for the 20 features that would be used to calculate the Overall Customer Experience Index for each broker.
The top six attributes together account for 51% of the importance. The characteristics in this tier are website security, trade execution speed/price, site performance, equity trading platform, customer service, and research tools.
The middle six attributes together account for 27% of the importance. These tier-2 attributes are investment research, portfolio analysis and reports, timely information on market shifts, incentives/discounts/pricing, trade ideas, and choices for cash management.
The bottom eight attributes account for 22% of the importance. The third tier consists of: availability of account types, mobile trading platforms and apps, coverage of premarket and after-hours trading, educational resources, up-to-the-minute data on inflation and other market-influencing statistics, trade ideas for a down market, options trading platform, and wealth management.
Clients Weigh In On Their Brokers
Phase 2 of the online broker comparison study measured consumers' experience and satisfaction with their primary online broker.
From Oct. 12 to Nov. 20, 2023, the Phase 2 survey collected the participation of 2,775 investors. Of the 2,775 respondents, 1,481 were IBD website visitors, 830 were Wall Street Journal research panelists, and the remaining 464 came from TechnoMetrica's consumer panel partners. The Wall Street Journal and IBD are both part of Dow Jones.
To qualify for our online broker comparison ranking, a broker must have had at least 150 customers take part in our Phase 2 survey.
Fidelity Investments, Charles Schwab, E-Trade (a subsidiary of Morgan Stanley), Interactive Brokers, Robinhood, Merrill Edge (part of Bank of America), Ally Invest (part of Ally Financial and Vanguard Brokerage met the threshold.
In Phase 2 of the survey, investors rated their primary broker on the 20 attributes using a five-point scale (excellent, very good, good, fair and poor).
We developed a customer experience index for each broker attribute using the following question: Based on your experience with your primary online broker during the past six months, how would you rate your primary online broker?
The customer experience index denotes the difference between the percentage of respondents giving ratings of excellent and very good and the percentage who gave ratings of fair and poor.
We computed the overall customer experience Index for each broker using the weights developed in Phase 1 for the 20 attributes of this online broker comparison study.
Raghavan Mayur is president of TechnoMetrica Market Intelligence.
Licensing & Reprints
The 2024 Best Online Brokers logo and accolades are available for licensing through IBD's partner, The YGS Group, at IBDlicensing@theYGSgroup.com or 800-290-5460.
