FROM OUR PARTNERS

Best ETF Brokers of 2022

Ashley Jackson

ETFs can be an effective way to achieve a diversified portfolio. Set yourself up for success by selecting a broker that understands your needs. We’ve considered the best online brokers based on commissions, account minimums, ease of use, and overall quality.

Trade a wide range of financial assets

$0 - $9.95

Fee Per Trade

$0

Account Minimum

Overview

Ally Invest offers competitive pricing on financial securities and robust research tools to help you make better-informed investment decisions.

What we like

  • Low cost commissions 
  • Wide selection of product offerings 
  • Up to $3,000 cash bonus
  • No minimum deposit required
  • Up to $75 for brokerage transfers

What we don't

  • Crypto not supported
  • Mutual fund fees

Get up to $625 when you open and fund an account

$0

Fee Per Trade

$0

Account Minimum

Overview

J.P. Morgan Self-Directed Investing offers beginners and seasoned investors free trades and a portfolio tool to help build out their asset allocation.

What we like

  • Unlimited trades with $0 commissions
  • No minimum investment
  • Manage investments from a mobile app
  • Portfolio builder tool to help with asset allocation
  • Access to research and insights

What we don't

  • Limited accounts, such as no SEP-IRA
  • No fractional share trading

INVESTMENT AND INSURANCE PRODUCTS ARE: NOT A DEPOSIT • NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE

Copy investments from successful traders

$0

Fee Per Trade

$0

Account Minimum

Overview

eToro is a multi-asset platform that offers both investing in stocks, cryptocurrencies, and trading in CDF assets. It provides an innovative approach to ‘Social Trading,’ also known as ‘Copy Trading.’ Social trading allows users to connect, share their trades, and copy successful traders’ trades for potential gains.

What we like

  • Commission-free real stock trading
  • Offers money and risk management tools
  • A lot of learning materials available
  • Offers a free demo account
  • Copy successful traders investments

What we don't

  • Higher spreads and rollover fees
  • High non-trading fees

Discover new ideas from an active investing community

$0

Fee Per Trade

$0

Account Minimum

Overview

Public provides access to a powerful suite of tools, daily insights from millions of investors, and curated content and news, so all members can have the tools and resources needed to invest with context.

What we like

  • All-in-one investing platform 
  • Wide selection of product offerings 
  • Commission-free
  • Insights from an investing community of millions
  • Invest in any fractional asset
  • Live in-app shows about the markets

What we don't

  • Limited account types
  • No in-person customer support

Margin trading available with premium account

$0 - $9.95

Fee Per Trade

$0

Account Minimum

Overview

Axos Self-Directed Trading provides investors commission-free trades and an all-in-one solution for banking and investments.

What we like

  • Commission free trading on most assets 
  • Easy to use platform
  • Wide selection of product offerings 
  • No minimum deposit required
  • Extended market hours for premium accounts
  • Joint accounts available

What we don't

  • Crypto not supported
  • Premium account required for certain features
  • No in-person customer support

Offers fractional share trading

$0

Fee Per Trade

$0

Account Minimum

Overview

SoFi allows you to trade cryptocurrencies, stocks, and ETFs. It also uses the SIPC protection scheme and offers up to $500,000 in insurance coverage.

What we like

  • Free trading on ETFs and stocks
  • Offers fractional shares
  • A wide variety of cryptocurrencies
  • Free financial advice
  • No account minimum

What we don't

  • Does not offer mutual funds, bonds and options
  • Limited track record

What do ETF brokers do?

An ETF broker is an individual or company that acts as an intermediary between a person looking to invest in the market for ETFs. The broker will ensure that all the paperwork is filed correctly, that there are no errors in any of your transactions, and they will assist you with any issues you may have while investing.

They also advise what stocks to buy and sell based on your needs and goals. Additionally, they can help you set up an IRA or 401K plan to help save for retirement.

Why use ETF brokers?

Here are some of the reasons why you should use ETF brokers:

  • Trade flexibility: An ETF broker is an online broker who facilitates buying and selling funds and provides flexibility. For example, an ETF broker allows you to trade your account from any location using your personal computer or mobile device.
  • Portfolio diversification and risk management: A major benefit of using a broker to buy and sell funds is that they can help you manage your portfolio risk by ensuring that all your assets are balanced across various asset classes. This enables you to avoid bottoming out one particular investment class at the wrong time or losing money due to concentration risk in any area of your portfolio.
  • Educate you on which funds to invest in: If you want to buy shares in ETFs, you need to know what investment is best for you. ETF brokers help investors make this decision by providing advice on how much risk they should take with their investments, how to diversify their portfolios, and which funds will provide them with the highest returns for their money. You can also simply invest in a self-directed way as well.

Are ETF brokers safe?

Reputable ETF brokers are safe. ETF brokers are regulated by the Securities and Exchange Commission (SEC) and must abide by strict rules to protect their client’s interests.

Search up the ETF broker to see if they are licensed and registered to determine if they are legitimate.

What are the fees for ETF brokers?

ETF brokers charge fees for their services, but they are generally much lower than those charged by banks or third parties. The exact amount depends on the transaction and the type of account used by the broker, but it’s typically around 0.01% of the turnover value involved in each transaction. This is usually much less than what banks would charge for similar services.

There are some brokers that charge no commissions when you buy or sell ETFs. However, keep to note that the ETF fund itself has a management expense based on a ratio.

What types of ETFs can you invest in?

There are many different types of ETFs that you can invest in through brokers. The following are just some of the most popular ones:

  • Equity funds: Equity funds invest in stocks and other securities representing a company’s ownership share. Equity funds are further classified by their investment styles, such as value or growth, and the size of the companies they typically invest in, such as large-cap, mid-cap, or small-cap stocks. Equity funds also carry different risk and reward potential levels, depending on the fund you choose.
  • Fixed-income funds: Fixed-income funds invest primarily in bonds issued by governments or corporations. As with equity funds, fixed-income funds can be broken down into different categories based on their investment style and maturity date (the length of time until they mature). These include government bonds (typically safer than corporate bonds), municipal bonds (issued by state and local governments), and corporate bonds (issued by corporations).
  • Commodity funds: Commodity funds invest in commodities like gold, silver, or oil futures contracts to hedge against inflation or economic downturns. Commodity ETFs may also be used to track an index representing commodities prices across various global markets.
  • Currency funds: These funds aim to profit from the fluctuations in currency values. The fund manager will seek to take advantage of a currency’s price difference and exchange rate. This can be done by buying low and selling high or shorting a currency when it is expected to decline in value.
  • Real estate funds: Real estate funds invest in properties like residential and commercial real estate properties. Typically, real estate investment trusts (REITs) will pay dividends which are traded on the exchange.

Benefits of investing in EFTs

The following are some of the advantages:

  • Diversification: ETFs can be broadly diversified across asset classes, such as stocks, bonds, or commodities. They may also narrowly focus on one sector or asset class.
  • Low cost: ETFs are designed to minimize expenses, saving you money over time. Some ETFs have annual expense ratios as low as 0.05%, while others charge up to 2% annually.
  • Trading flexibility: ETFs, like stocks, can be bought and sold throughout the day, making them ideal for investors looking for short-term profits.
  • Transparency: Some ETFs are transparent, meaning that the fund’s price is calculated based on its holdings’ current value. Other ETFs have a fixed NAV (net asset value), meaning their price can differ from their underlying assets. In addition, some ETFs use derivatives to hedge against risk.

How to choose the best ETF brokers

When choosing an ETF broker, you should look for the following:

  • Strong industry reputation: A good reputation is essential because it reflects the quality of your investment experience. An ETF broker with a strong industry reputation will likely have many satisfied customers and a long history of providing high-quality service. You can learn more about an ETF broker’s reputation by reading reviews from other investors. You can also check the company’s website to see if a regulatory body has audited it like the SEC or FINRA.
  • Up-to-date security standards: The best ETF brokers offer cutting-edge technology that allows them to protect your assets from cybercriminals and hackers trying to steal money from your account to prevent unauthorized withdrawals or changes to your holdings.
  • Solid customer service: You want a brokerage that will be there when you need them, even if you’re new to investing or have a simple question about your account. Look for a firm that has multiple ways for clients to contact them: phone, email, and live chat support are all excellent things to see on a brokerage’s website.
  • Reasonable costs: The cost of using an online brokerage firm depends on several factors, including the number of trades you place each year and how much money you keep in your account regularly. Some firms charge monthly fees; others charge per-trade fees or annual fees. If you’re opening a new account at a brokerage firm, check out its fee structure before signing up, so there are no surprises down the road.