How to Choose a Broker for ETF Investments - dummies

How to Choose a Broker for ETF Investments

You can’t personally buy a share of an ETF — you need someone to actually buy it for you and hold it for you. That someone is a broker, sometimes referred to as a brokerage house or a broker-dealer.

Here are the some things you want from any broker who is going to be holding your ETFs:

  • Reasonable prices. Comparing the prices at brokerage houses is anything but easy because each house identifies its own pricing criteria: Some base prices on how much money you have in your account or how many trades you make per quarter; others use that criteria but also consider the number of shares you trade at any particular point, and so on.

  • Good service (they pick up the phone without putting you through voicemail gymnastics) and good advice (if you think you’re going to need an expert opinion).

  • A user-friendly Web site (or, if you like doing business with real human beings, a service center near you).

  • Incentives for opening an account, which can run the gamut from a certain number of free trades to laptop computers.

Before choosing, always look at the entire brokerage package, which includes not only the price of trades but also total account fees.