Best broker for the long-term?

Discussion in 'Retail Brokers' started by neutrino, Jan 22, 2009.

  1. I am thinking of putting some of my capital in a long-term portfolio. It will be very diversified, mostly through ETFs, and will probably be adjusted only once or twice a year. I plan to hold this portfolio for as long as I could, hopefully for many years and it will be the last that I liquidate if I need cash to spend.

    So I am looking for a good broker. The major requirements are reliability of the broker, safety of the account and no penalty for inactivity. Fast execution, low slippage, advanced charting, DOM, top-notch customer service, or low commissions, are obviously unimportant.

    I think Interactive Brokers offers maximum safety, and I think they have no inactivity fees. I only hope they don't close my account or something like that.

    Do you guys have a better suggestion for a broker that fit my needs or would add some other requirement I am overlooking?
  2. A broker such as Charles Schwab or Fidelity would be best for holding a long term investment portfolio and not trading.

    If you don't do any trading IB will charge you $10 a month data fee and might eventually close your account. If you were also trading at IB then IB would be suitable for holding a long term investment portfolio.
  3. I think the $10 fee can be avoided at IB, but I will not get any quotes on which to trade. This is not a problem, because I don't need real time quotes to open a long-term position.

    But I will look into Schwab and Fidelity.
  4. Even if you subscribe to no no data feeds IB has a minimum monthly activity fee of $10.

    "IB caters to professional traders and investors and requires its customers to spend a monthly activity fee minimum which may include commissions, market data fees, special connection minimums and other fees. Those customers spending less than the activity fee minimums (as stated below) in any given month will be charged the difference between the minimum and the amount spent in a month."
  5. IB all the way. And you could have a couple of 'punts' a month (daytrade some biggies) to ensure the 2 drawbacks don't happen. Hell, you may even get to like taking a few hundred bucks out of the market each week!:)
  6. I also checked Wells Fargo. They have $50 annual account maintenance fee, but it can be waived for accounts above $25,000. This means you can practically let the stocks sit there for years and incur no costs at all (if you don't trade). Wells is not a bad proposition, but I noticed they don't have futures. I don't see why I will need to trade futures in a long-term account, so that's ok. They have options though.
  7. You are correct, I just saw that. Thanks!
  8. Edit: I made some calculations about the transactions I have to make to rebalance the portfolio and it turned out that IB still beats Wells Fargo, even if you waive the $50 inactivity fee at Wells. Wells Fargo has $19.95 commission per trade. I will need about 10 trades a year to rebalance the portfolio and this adds to $199.50 in commissions. At IB the inactivity fee will be $110 (for 11 months) but only about $10 in commissions, which adds to only $120 per year. So I guess it depends on individual preferences, but IB seems to be the low cost leader even for long-term investors.