NerdWallet’s comprehensive review process evaluates and ranks the largest US brokers and robo-advisors by assets under management as well as emerging industry players using a multi-faceted and iterative approach. Our goal is to provide an independent vendor rating to provide you with information and make informed, informed judgments about which will best suit your needs.
DATA COLLECTION AND REVIEW PROCESS
We collect data directly from vendors and conduct first-hand tests and observations through vendor demonstrations. Our process starts with sending detailed questionnaires to providers to fill out. The questionnaires are structured in such a way that both positive and unfavorable answers are generated by providers. They are not designed or prepared to achieve predetermined results. The answers to the questionnaire in combination with product demonstrations, surveys of employees at the providers and practical investigations by our specialists promote our own evaluation process, in which the performance of each provider is assessed on the basis of more than 20 factors. The final output gives star ratings from poor (one star) to excellent (five stars). Ratings are rounded to the nearest half star.
Ratings vary by type of provider, but in each case are based on the weighted averages of the factors, including but not limited to: advisory and account fees, minimum and account types, investment choices, investment cost ratios, trading costs, access to finance consultants, training resources and tools , Options for realignment and tax minimization and customer support, including branch access, user-centric technology and mobile platforms.
Each factor can include the evaluation of various sub-factors. For example, 80% of the scoring when evaluating the investment choices offered by robo-advisors is based on the diversification potential (how well diversified a resulting investment portfolio might be) combined with the availability of specialty portfolios and the degree of customization for investors. Expense ratios make up an additional 10% of the score and the remaining 10% is little or no management fee.
The weighting of each factor is based on our team’s assessment of which characteristics are most important to consumers and which are most meaningful in influencing the consumer experience. The factors taken into account and the weighting of these factors change depending on the category of the verified provider.
Provider categories include: Best Brokers For Stock Trading, Best Brokers For Beginners, Best Brokers For Day Trading, Best Brokers For Options Trading, Best Discount Brokers, Best Brokers For Free Trading, Best Investment Apps, Best Brokers For Penny Stocks , Best IRA Brokers, Best Robo Advisors, Best Financial Advisers, Best Real Estate Platforms, Best ETF Brokers, and Best Mutual Fund Brokers.
Writers and editors conduct our broker and robo-advisor reviews annually, but update them continuously throughout the year. We maintain frequent contact with providers and point out changes in the offer.
The review team consists of seasoned writers, researchers and editors who cover stocks, bonds, mutual funds, index funds, exchange traded funds, alternative investments, socially responsible investments, financial advisors, retirement planning and investment strategies on a daily basis. In addition to NerdWallet, our team members’ work has been featured in the New York Times, Washington Post, Forbes, USA Today, Bloomberg News, Nasdaq, MSN, MarketWatch, Yahoo! Finance and other national and regional media.
The combined know-how of our investing team flows into our review process to ensure a careful evaluation of vendors’ products and services from a customer perspective. Our writers and editors have over 70 years of financial experience, from a former Wall Street Journal reporter to a former senior financial advisor at Merrill Lynch.
While NerdWallet has partnerships with many of the vetted vendors, we manage potential conflicts of interest by maintaining a wall between our content and business operations. This wall is intended to prevent our writers and the review process from being influenced or influenced by our business partnerships. In this way, all reviews can provide an unbiased review that serves the interests of our users. Please see NerdWallet’s editorial guidelines for more information.