Being a top-leading broker company in the United States of all places can’t be easy, right? Namely, this part of the world is quite strict and competitive when it comes to trading regulation. Not just anyone can provide trading services here in any area. The regulatory frame goes as high as the Congress and leads all the way back down to the small but mightly regulatory authorities and agencies that work so hard at making sure that your trading experience is as pleasant and enjoyable as possible, as well as safe for your data and funds.
So, what makes Ameritrade so special? This company was established way back in 1975, so it is safe to say that it is one of the pioneers of the trading world. Also, it was able to acquire quite an admirable group of clients in the past couple of decades, which is no surprise. However, some suspicious facts and accusations about it seem to be emerging lately, and we had no choice but to address them. Is it just a temporary mistake, or an unacceptable crime? In this Ameritrade review, we will answer this and many other burning questions you may have about Ameritrade.
Quality of Service
The first thing that we should talk about here is the trading platform, of course. Namely, for years this company was able to keep the number one spot when it comes to trading platform top-lists by reputable watchdogs. It has an equal appeal when it comes to the web, desktop and mobile trading platforms equally. Here, you can trade futures, options or stocks, as well as take advantage of a variety of tools and trading signals to make your trading more enjoyable and your strategy solid and winning.
The special platform mode that we would like to pay attention to is called Thinkorswim. The catchy name is tied to the simulated trading platform that helps you find your way around and learn about trading without any strings attached. That’s right! Thinkorswim does not require you to put any money into your account. Rather, it works similar to the free demo account, which you can use as long as you wish to try and acquire new trading skills and knowledge to help you get ahead.
That’s not all. Apparently, the Thinkorswim option then divides into two different but similar trading solutions, both available through your mobile devices. The first one is TD Ameritrade Mobile, and it is designed mostly for casual investors. These are the clients who only want to check out what’s new and trade without any specific goals set in mind. Rather, they are ready to take on each day with everything that it brings.
The second platform type here is the Thinkorswim Mobile. Though it sounds similar to the previous one, it is actually a lot different. It includes many details and advanced trading tools and signals designed specifically for high rollers and dedicated clients. Which one are you?
Speed of Response
In theory, Ameritrade has a solid customer support team that is always ready to help you in any way they know how. To do so, they use several communication channels including live chat, email and telephone. They are also available 24/7 on all of them, which is quite convenient. However, our experience was a lot different, as well as many of the clients.
Namely, on more than one occasion the clients were redirected to other tabs with different content type, where they were sent to wait for a reply or a connection with the agent available. This option usually does not work like that at all. Namely, the live chat option is usually able to connect you with the agent within just a few seconds! So, we find this more than strange and suspicious. We haven’t had much luck with other options as well – they take several days to reply on the email while telephone number is always busy, so we don’t really see the purpose of the customer support at all if you can never reach it.
The depositing and withdrawal methods at Ameritrade can be found on the Funding webpage. At least, the half of them. Namely, while this company explains to you in great detail how can you make a deposit, it does not say a word about the withdrawals. I guess we could have contacted the customer support to find an answer to this, but we already know what that would look like.
Namely, there is no minimum deposit requirement for trading with any account type, which is great news. Also, you can choose between 5 different payment solutions for these requests, including:
- Electronic bank deposit (ACH) – you just don’t hear about this option quite often, mainly because it is quite traditional. It also takes up to 5 minutes to process your request, so what’s the catch here, Ameritrade?
- Bank wire transfer – alright, we’ve heard about this one before. It also takes just a day to process your deposit request, which is great!
- Check – this option is closely tied to the previous one with one important difference – it takes up to 3 business days to be processed. Who has the time?
- Account transfers between firms – the main reason why you never hear about this option is the fact that it takes up to 1 week to process
- Physical stock certificates – although they do take about a day to process, the whole step-by-step explanation about how to use it is quite confusing.
Considering that Ameritrade does not take any commissions on your deposits, the question imposes itself – how does it achieve any profit, then? Well, you would be surprised at how slick Ameritrade actually is when it comes to this topic.
The first and most obvious way for them is to take interest on cash. This, of course, depends on the amount that you have on your account as well as the difference between what you paid and the customer cash balance. Let us just say this – it is quite a lot when you put it all together. Then, there is the commission on the payment for order flow, which goes from 0.0015% per share to $0.51 per options contracts. Then, the significant amount in commission can also be acquired through the price movements. The thing about them is that you do not look at them as something significant at all, but for big companies, they can bring quite a lot of profit through a single trade.
As we mentioned already, in order for a company to be able to provide trading services in the United States, it would have to have a lot of back up in terms of licencing. Luckily, Congress has
created quite a strict regulatory frame in this area. As a result, not every company can become your trading services provider. However, the ones who do, usually own one (or all) of the following licencing types:
- SEC – short for Securities and Exchange Commission, this is a governmental regulatory agency that ensures not only your safety when it comes to trading, but also a great flow of all financial services within the national fiscal system
- FINRA – the Financial Industry Regulatory Authority is a privately owned regulatory agency which works independently from the Congress to make sure the companies are following the regulatory guidelines on the market
- CFTC – the Commodities Futures Trading Commission is the latest regulatory agency that imposes rules, regulatory frames and other guidelines for the trading companies to follow.
Variety of Payment Options
As we mentioned already, there is a satisfying selection of payment options for deposits, but the withdrawals are a different story entirely. We weren’t able to find any details about the banking options here, which is quite suspicious and discouraging, especially for such a reputable company. The only option that is remotely similar to making a withdrawal is market as rollover the retirement account. Here, you are offered three options – the first one is to cash in on a check that someone deposited on your name. Then, you can also try the option of transferring the money from a different account or cash in on your 401(k) plan. However, if you know anything about the 401(k) plans that is the fact that they should not be used for this purpose, or cashed in at all until you actually retire. So, this section is overly and unnecessarily confusing for us, so we can only imagine what it must feel like for the first-time visitors.
While Ameritrade definitely has some good sides, the bad sides seem to outshine them completely. Overall, we would recommend staying away from this big name, because it is definitely not what it used to be, despite its once shiny reputation and many praises in the online trading community.