Our investment club just finished reevaluating our broker. We do this every couple years to make sure we’re getting the best service and the best rates. We decided to stay with Scottrade [1].
Scottrade Account Details
- Account Minimum: None
- Opening Account Minimum: $500
- Account Fees: None
- Trading Fees: $7 per trade (market or limit), which includes stock and ETF trades*. Options have an additional $1.25 per contract. Mutual funds are free or $17 per trade depending on the fund.
Scottrade Details
Local Office. This comes in handy for an investment club, since we switch officers yearly. We still make all our trades online though.
Multiple Checks. Scottrade [1] accepts deposits from multiple club members, something that many other brokers don’t allow. It becomes a hassle when you need to deposit checks at the bank and transfer the money monthly.
Integration with Software. We use Bivio [2] for our club software, which is compatible with Scottrade [1] to download our transactions. It makes the treasurer’s job much more manageable.
Cheap Trades. $7 trades work out well; it’s not the cheapest, but it is still inexpensive. We researched some of the low-cost brokers, but they didn’t offer all the services above, which are important for an investment club.
Individual and IRA Accounts. I also use Scottrade [1] for some of my personal accounts and my family members [3], and my only complaint was when I ran into their silly fees to change my name [4].
Investment Clubs
I’ve been a member of our investment club since 2002. Here is more information about running an investment club: