Choosing brokerage firm(s)

The short summary is:
- once you have considerable assets (IRAs, Roths, regular), consolidate into one place
- avoid high cost brokerages, which are the old time big names (Smith Barney, JP Morgan, Merrill, etc).
- Among the discount full-service places (Fidelity, Vanguard, Schwab), I don't think there is too much difference righ now. Among the ultra-value places (E-trade, Ameritrade, etc), I don't think there is much difference. What type of firm you choose is up to you and the relative costs on how you intend to trade.
- once you consolidate, you probably won't want to move assets very often (at most once a decade)
- you can compare costs now but remember the brokerages change their costs and fees over time, so it is important to choose a brokerage that has historically treated their customers well, since you won't likely switch.
- In trades, keep commissions below 0.3% of the trade, preferably below 0.1% of the trade. Your firms fees can influence this if you're making small trades of $2K or less.

My personal preference is for places that started out with a customer focus, offering a unique benefit. I like Schwab as they were the first big discount brokerage with many services. I also like Vanguard which has consistently kept its costs very low, though they have grown from largely handling their own excellent mutual funds to a full service brokerage. I'm a bit leary of Fidelity as they originally were a mutual fund house with many good funds but they charged significant loads (3% entry fee back in the 80's). While they have become a pretty good low-cost firm, it is mainly because they were forced to do so. They scoffed at index funds for a long time but back in the late 90's (?) started offering a few very low cost Spartan index offerings.

I like the bigger companies once you get significant assets, because once you start doing other transactions like buying a house or giving assets away as gifts or charity, you need other services like wiring or DTC. And it is nice to be able to drop in to an office once in a while.

If you have a more modest pool of assets (say less than $50K) and intend to do some trading for fun and loss (I mean profit) and you have the time to monitor all this, then choose a low-cost firm that minimizes your type of trading costs. Namely if you're intending to trade stocks, keep stock commissions low. My office mate opened an account at zecco.com because they have free stock trades and he intends to trade small amounts so even a $10 commision would be significant; of course there are several restrictions to this account. There appear to be other ultra-low cost brokerages if you are so inclined. But remember if you insist on trading individual stocks, make sure that it is less either less than 5% of your holdings or less than $2K; invest the bulk of your money in diversified or safer holdings such as mutual funds, ETFs, T-bills or safe bonds.