Friday, November 25, 2005

E*Trade - Why I love and Hate it

I love Etrade. I hate Etrade. Both statements are true.

Why I love Etrade:

  • Beautiful Site Design
  • Simple Intuitive Navigation
  • No fee IRA
  • Painless and elegant funds transfers
  • They just approved me for options trading
  • Quick and attentive email customer service
  • Fee refunds for ATM fees if you use ETrade Bank

Why I hate Etrade:

  • Their mutual fund information is often wrong:
    - HENLX, wrongly told me the IRA minimum was $2000 (it really was $250). Wrote them, the fixed it.
    - FLSCX, wrongly told me the IRA minimum was $250 (it really is $10,000).
    - SEMKX, wrongly told me that it was a no-load no-transaction fee fund. They don't even offer it.
    After them telling me that these funds are open, I then did the research and decided to put money into them (5 to 10 hours per fund). That's a lot of wasted time.
  • Not buy and hold friendly for small investors. I paid about $250 over 3 years (on an account with a value at times as low as $500) to hold my account. I started with $1k, ended with $500. This was over the crash in '01 but my biggest losses weren't because of the market but because of their $40 quarterly inactivity fee.

If you're opening an IRA, E*Trade is great. If you're a small investor looking for a brokerage account - I'd say you're better off at Scottrade - $7 trades and no account or inactivity fees. Sharebuilder is interesting, but make sure you read the fine-print of their fees. Those $4 trades are cheap, but their other fees are ghastly. I have no opinion of Ameritrade.

This has been a precursory and non-scientific comparison. I use Etrade. I am happy with my IRA account, and I will be canceling my brokerage account January 1 (when I can then transfer more funds into my IRA). I'll let you know how my search for another non-retirement brokerage goes in a few years once I have enough funds to actually open a non-retirement brokerage account.

1 comment:

Anonymous said...

If anyone ever asked me, I'd warn them against E*Trade at all costs. They do have a nice site, but their customer service is all automatic, and virtually impossible to get a straight answer from. Plus, you need to submit all sorts of paper (yes, **PAPER**) forms in order to undertake many transactions (this at an *online* broker!).

I've been trying to close a CD at ETrade for nearly four months, with no success. First, they claimed they had no record of having received a print request from me. Then they claimed my second request needed to say I wanted to accept the early withdrawal penalty (this although my one year CD has been rolling over for nearly five years without my ever having received a renewal notice from them!).

Very very frustrating -- I'd recommend against using them as a bank or broker. And now with the news about their financial troubles, I can't imagine their customer service is going to get any better. Far from it is my guess.