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NerdWallet V.P. of Financial Markets Joanna Pratt on a study on the fees charged to investors for their trades.
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On to more important news -- online investors shocking new figures out revealing just how much money you're blowing -- your brokerage.
I was seventeen million investors are overpaying.
Totaling more than one point eight billion dollars every year with more Joanna -- Vice president -- financial markets at nerd wallet dot com.
Joanna thanks for coming on the show tonight -- this is important news you guys have conducted a big study of all the online major brokerages.
How is it that you believe so many of these investors are wasting their -- Well thanks for having me like you -- we did a big study and what we found.
Was -- people don't really do a lot of homework before choosing -- online brokerage.
Instead they just really rely on the baby and took the talking baby commercials.
And really and the recommendations of friends.
And so what you end up where onsite allowed act but don't worry you said what we -- you will end up with yet what.
It what we end up with is people paying nine or ten dollars -- -- basic equity trade when the reality is they're more than seventy different online brokerage is out there.
Virtually all of which can do the exact same thing for you for only one to three dollars.
Ari says it'll -- -- and insert your study that I really wanted to zero and on because this is what blew me away.
Is the range of prices you don't pay for a single trait take a look at this.
So a comical speed trader -- charging 99 cents for trade interactive brokers a buck.
But if you go to -- -- nine dollars and 99 cents Charles Schwab 89 TD Ameritrade.
Also 999 -- -- -- such different such huge variety in trades.
-- any consumer could you simply look this up and find the cheapest player.
The truth is a lot of people just don't bother to look it up.
The reality is that Schwab and E*Trade -- TD Ameritrade each spend an average of more than 200 million dollars a year in advertising.
And that gives consumers a real sense that there they're serious broker when the truth is.
Take interactive brokers for instance they've been around since 1977.
They have over 200000 customer accounts.
They're also very serious brokerage and they only -- -- dollar trade.
Yeah want to great alternative.
Of course another thing that people like to talk about as the speed of the trade Charles Schwab's ten seconds from I believe that's right.
It's a less than -- stipend each trade.
Point 26 seconds point nine ever interactive brokers if you care about that kinda thing the execution is really really quick.
And then that's -- online brokerage deals if you find a new account.
There are bonuses that -- can get E*Trade has bonuses of fifty to 500 these are cash bonuses Ameritrade giving -- a hundred dollar to 600 dollars cash bonuses.
And Charles Schwab will give you a free android.
With -- 5000 an initial deposit so there really paying up.
For these accounts must be a lot of competition in this field do you see a shake -- coming.
I'm not necessarily most of the consumers that we talked to actually seem pretty happy with -- trade Schwab and TD Ameritrade.
-- I think it's really a sense of trust you see the baby commercial you feel like all your friends are trading there.
So.
We really don't see anything.
In the short run to change things they have a good thing going and the probably continue to spend so RE -- well thanks for pointing out the differences in costs it's very important to our viewers.
Thanks so much for that will.
