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I started using Schwab because a girl I was dating at the time used them. That was 15 years ago, and I've never thought much about it. I'm highly illiterate (financially) and have mostly left my $50,000 -- $100,000 in low-return instruments.
My question: how does Schwab compare to the more modern online brokers like E*Trade? Why would someone choose one over the other? Is it all based on reputation, or are there fundamental differences?
In my opinion, Schwab is pretty good and their commissions competitive. You should be using their no-commission ETFs to take full advantage of your relationship.
Though Schwab's ETFs are new, their ERs are one of the lowest you'll find.
Schwab's reports are tools are their biggest strength. They are well thought out and very useful.
Schwab's closest competitor is Fidelity. Whatever Fidelity does, Schwab will usually offer something similar!
If you are happy with them, no reason to switch. There are some brokers that offer lower commissions, but these are all new players and haven't proven themselves like Schwab.
Some like Zecco even pulled a bait-and-switch with their zero commissions.
Barrons does a good survey of on-line brokers in an article titled Making the Right Connection. As you can see, it all depends on what you are looking for (cost, products, service, research etc.)
Schwab is pretty good overall -- good service, low costs and access to advice and such if that is important to you. They also have a really good online bank that refunds all ATM transaction fees, including international fees.
I use Schwab and TD Ameritrade Apex. Ameritrade is better if you're a high-frequency trader. You can also trade a variety of ETFs for free. Schwab lets you trade their branded ETFs for free. A few years ago, Schwab had aspirations to be a cheaper version of Merril Lynch, and tried to appeal to affluent folks who weren't quite wealthy enough for private banking. They've since abandoned that push and are a good discount broker.
