Firstrade is an online trading platform that offers two portals, its primary brand, Firstrade, and a secondary brand called Firstrade Navigator. They are competitively priced, offer many types of securities, including mutual funds, give users the ability to engage in sophisticated types of trading and provide high-caliber research material. However, the website’s design leaves something to be desired, a weakness apparent as soon as you open this product and continues as you click past its homepage. Keep in mind that a financial advisor can help you create a solid investing plan and set of goals, and that, in turn, will be useful as you decide on which platform to do your investing.
Services & Features: What Does Firstrade Offer?
Firstrade is known as one of the first low-budget trading platforms on the internet, as well as for offering trading services to residents in a wide variety of countries and languages.
Perhaps the best part of Firstrade is the range of assets this service offers. While not a full-service brokerage like the major players in this space, Firstrade does offer a significantly more well-rounded series of choices than many of its more stripped-down competitors. Investors on Firstrade can invest in stocks, exchange-traded funds (ETF), options, mutual funds and bonds.
It’s important to call out these last two. Mutual funds and bonds are an important part of most investors’ portfolios. For a retail investor, products like these should typically make up a significant portion of your long-term holdings. This is particularly true of index funds, given that a very low percentage of professionally managed funds historically beat the S&P 500. This gives Firstrade a notable and important edge over comparable products like Robinhood and Webull. Unlike those platforms, you can use Firstrade for your entire portfolio rather than having to choose different trading tools for your speculative assets vs. your long-term investments.
Firstrade is primarily built around its website interface, but it also offers an app which syncs seamlessly with your web-based trading. (This is not a particularly noteworthy feature, as both interfaces simply draw their data from the same portfolio.) You can also place trades over the phone and receive assistance via phone, email or chat.
This service offers a wide variety of account types, including IRA, educational, dedicated business portfolios and others. It also offers a decent variety of research options for users to dive into.
The research options available through Firstrade are, again, beyond what is offered by other budget trading platforms. You can get all of the basic technical indicators that an investor has come to expect, ranging from the price history and trade volume of an asset to more sophisticated data such as bid-ask spreads and basic volatility metrics. In addition to this, Firstrade offers fundamental analysis with access to Morningstar streaming news sources.
However, many of Firstrade’s best research tools are gated behind two separate products, the Options Wizard and Firstrade Navigator. Both of these require you to create a separate account. Moreover, while Firstrade Navigator has much of the platform’s best data and customization, it is gated exclusively for investors with a minimum $10,000 balance. This is likely not a problem for people who use Firstrade for portfolios like their retirement accounts, but it is an issue nonetheless.
Pricing: How Much Does Firstrade Cost?
As an investor you should generally look for four types of fees attached to an online trading platform:
Trading Fees – Any charge attached to each trade that you make. This can come in the form of a flat fee, or more often will be based on the “spread.” This is the difference, if any, between the buying and the selling price of an asset.
Trading Commissions – This is when a broker will charge you a percentage based on the volume or value of each trade, based on the value of assets in a specific investment, or based on the total value of assets in the portfolio.
Inactivity Fees – Any fees that the broker charges you for not trading, such as if it charges you for keeping money in a brokerage account.
Non-Trading/Other Fees – Any form of fee for trading on this platform not covered above. For example, a brokerage might charge you for making deposits into your brokerage account or taking money out.
Firstrade was one of the first brokers on the internet to offer completely free trading, and even today is usually cheaper than any of its competitors. This platform offers free trading in stocks, ETFs, mutual funds and options. This last is rare, if not unique, among online trading platforms.
Investors pay a net yield basis to trade bonds, and margin trading is available starting at interest rates of 8.75%. Broker assisted trading typically comes with an additional $20 charge. Firstrade does not charge inactivity fees, but does charge some fees for basic activities such as transferring your money out. The exact amounts vary depending on how you move your money and what you choose to do.
Effectiveness: How Well Does Firstrade Work?
Perhaps the greatest weakness in the Firstrade platform is in its design. The truth is that online investing is an enormously complicated business. Inexperienced investors need an interface and layout that lets them learn the ropes while still competently managing their money. Sophisticated investors need a website that lets them navigate among a stupendously vast financial universe with ease. Neither category of investor wants to slow down and think about how to use their interface and the products in front of them.
Unfortunately that’s exactly what happens here.
As a website, Firstrade is generally poorly laid out. It is difficult to find assets, difficult to find information within those assets and difficult to create custom data sets for exploring your own trading options. However, the design for each individual asset’s screen is fairly well laid out, with critical technical data along the top and news and analysis along the side.
Some, but not all, of these issues are addressed in the companion platform Firstrade Navigator, but this simply feels unnecessary. As a user, the system forces you to split your time between two platforms (one of which has a minimum wealth barrier) in order to solve usability problems that shouldn’t exist in either environment.
The truth is that Firstrade has long identified itself as the budget-brand trading platform and it feels like it. Using this service does feel like using the free version of what should be an expensive product, and if that were the financial marketplace in 2020/21 perhaps Firstrade would have a more compelling case to make. This is particularly true for long-term investors who might log in less often and so have fewer issues with a clunky interface and technology that feels slightly slow and slightly dated.
However, pricing wars have long caught up with and surpassed Firstrade in the market. By now virtually all major trading platforms offer free exchange-based trading, and many offer free options contracts as well. While totally free mutual fund trades are rare, if not unique to this platform, most major brokerages offer extensive no-fee fund lists that can meet the needs of almost any retail trader.
In other words, today’s marketplace has set the standard that free trading platforms don’t need to feel cheap. Firstrade has a long and proud history, but at the moment it is falling behind.
The Bottom Line
Firstrade, which aims to serve the casual investor, is one of the least expensive trading platforms available and offers users the ability to invest in a broad range of securities. Further, support is available via email, chat or phone. However, it occupies a middle ground in the financial marketplace, offering neither ease of use for the novice nor sophistication for the experienced trader. In addition, it is poorly designed and thus neither able to compete the Webulls of the world nor sophisticated enough to replace E*TRADE. Whatever you need in an online trading platform, someone else is probably doing it better.
Tips on Investing
Not every trading platform is the right choice for you, given your unique goals, timeline and risk profile. A financial advisor can help you get clarity on those three factors so that you will know which trading platform to choose. Finding a financial advisor doesn’t have to be hard. SmartAsset’s matching tool can help you find a financial professional in your area to help you choose how to trade, what to trade and why. If you’re ready, get started now.
For investors who are just getting started, picking the right trading platform can be a key step in the process. Our guide on investing for beginners can help you learn the other key steps in this process, from learning the numbers to picking your assets.
Photo credit: ©iStock.com/izusek, ©iStock.com/Chainarong Prasertthai, ©iStock.com/andresr