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Home » Invest, Stocks

Zecco & TradeKing are Merging

Last updated by on 11 Comments

Two of the lowest cost (and my favorite) online brokers, Zecco and TradeKing, have officially announced a merger.

I have had a non-retirement account with Zecco and a Traditional IRA and Roth IRA with TradeKing for a few years, ironically, and have frequently mentioned both here.

At first I was surprised at the news, but I really shouldn’t have been surprised at all. The merger makes a lot of sense for the two companies – they offered identical prices for trades – $4.95 per stock or options trade and $9.95/$10 for mutual funds, both were strictly online brokers, and they are up against larger, well-funded, formidable competitors. Heck, the CEO’s of each respective company first met in middle school and then worked together at a prior employer, so perhaps it was destiny that they join forces again.

I don’t see any downsides to the merger just yet. Online discount brokers compete on price, service, features, and offerings. In this case, they have the same trading prices (and have confirmed they won’t change), both have good service and features, and the investment offerings should only expand with a merger.

tradeking zecco merger

I do have three questions that have not yet been answered through their merger FAQ’s yet:

  1. Will the merged company adopt Zecco or TradeKing’s annual IRA fee? My IRA is with TradeKing because they don’t charge a fee, while Zecco charges a $30 fee. I hope they opt for TradeKing’s fee structure.
  2. Which interface will they adopt? Both are good, but I prefer Zecco’s a bit more and the Zaptrade tool is pretty awesome.
  3. Which customer service team do they model? TradeKing has been ranked #1 in customer service for three years in a row in SmartMoney magazine’s broker rankings (2010, 2011, 2012). My experiences with Zecco customer service have been great, but with TradeKing’s service reputation, it seems natural that they might adopt the TradeKing model.

Even though the merger has not been officially approved by regulators yet, it seems likely to go through as the combined company won’t have a new-found dominant market share in the brokerage industry. Assuming approval, I have a short wish list for the new company, which would benefit all users:

  1. It would be great to see Zecco/TradeKing start to offer free ETF trading as Fidelity, Schwab, Vanguard, and others have started doing. Adding to ETF positions at $4.95 per trade is simply not cost effective. If you want to be a one-stop shop for investors, you really don’t have a choice.
  2. Adopt the TradeKing $0 IRA fee and don’t institute inactivity fees.
  3. Get rid of any account closing fees.

Can you tell I don’t like fees?

For the time being, it is business as usual for both companies.

What do you think about the Zecco and TradeKing merger, and what would you like to see from the new company in fees, features, service, etc.


About the Author
I am G.E. Miller, & this is my story. My goal is financial independence ASAP. If you share that goal, join me & 7,500+ others by getting FREE email updates. You'll also find every post by category & every post in order.


11 Comments »
  • AJ says:

    I remember how much I struggled to determine which of the two I would ultimately use for my first investment account! I chose Tradeking and have been happy with them; I hope that the merger only serves to strengthen both companies. By the way, it was your review of Tradeking that first made me check them out so I guess everything is coming full circle, G.E. :)

  • Charlie says:

    Tradeking has an “inactivity fee” that they just recently created and imposed on their existing customers with existing holdings. It stipulates if you don’t make a trade once per year or balance is not at a certain level you owe them $50 annual fee.

    Tradeking customer service was condescending and I was treated poorly when I called to complain that this newly created $50 fee would effect me and that when I signed up and purchased holdings that this fee did not exist so I shouldn’t be held hostage to it now.

    If they can create this fee out of thin air and apply it to existing accoutns and holdings then what’s to say they can’t create another fee tomorrow that says you owe them $100 if you don’t trade every week?

    I left Tradeking over this and went to Zecco. If Zecco adopts this fee I’ll be leaving them as well.

    • G.E. Miller says:

      $2,500 was the minimum balance to avoid an inactivity fee if you didn’t make any trades. I don’t like new fees either, but that particular one won’t effect most investors.

      • Charlie says:

        The tradeking inactivity fee may not affect all customers (for now), but with it they’ve set a precedent and now their propensity to create new fees on a whim with any stipulations they want and apply them to existing customers with existing holdings just might.

        And subsequently, when you call their customer service with any complaints, the rudeness displayed to customers might affect customers as well.

        Just sharing my experience.

  • Bichon Frise says:

    Free and $2 trades at vanguard would satisfy my needs (if I decided to do trades). And no annual maintenance fee/inactivity fee etc.

  • Tomas says:

    Another thing that makes the merger not so surprising is that I think they use the same clearing firm.

  • George P Burdell says:

    I’ve consolidated all my non workplace accounts at Fidelity as I really like their website, tools and customer service. Their $7.95 fee may seem high, but if your buying/selling is in large amounts ($2,000+) then the fee is miniscule.

    I’m a big Vanguard fan, but I didn’t like their website at all. Once Vanguard started doing ETFs; I didn’t need to keep my account there anymore.

  • rob says:

    Why is a 5 dollar fee to ETF trades make it not cost effective?

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