The information technology revolution gave rise to a host of discount stock brokerage firms in the late 1990s. Since then, brokers have vastly expanded their product and service offerings, while slashing their commissions costs and fees. There are benchmarks used to rank brokers.

Rating Providers

The primary providers of stockbroker rankings are SmartMoney, JD Power and Associates and Barron's magazine. There are hundreds of other lesser known and often informal ranking venues that can be found on popular trading message boards like elitetrader.com and clearstation.com.

Commissions

A primary factor in broker ranking is how much brokerages charge in equity and option commissions. In general, the lower the commissions, the better the ranking, provided customers don't suffer any lapses in service or execution as a result.

Service

Good service means different things to different traders and ranking organizations. For a full-service brokerage firm, good service would mean providing extensive financial guidance to customers seeking to have their hands held when making any investment decisions, while for an active trader using a discount brokerage firm, good service means getting quick, accurate answers to sometimes complicated questions about trading strategies and margin requirements.

Execution

Any trader wants to make sure that his buy and sell orders are executed as fast as possible and in line with the conditions he stipulated. The faster and more consistently a broker executes trades of varying complexity, the better it'll be ranked.

Trading Software

Trading software is important from both an execution and analytic standpoint. For execution, the trading platform has to be clearly presented and highly intuitive, allowing a trader to rapidly enter whatever type of order she wants, the quantity of shares she's trading and any other specific instructions, such as whether a trade is good 'til canceled or a day order. Trade platforms are also ranked for the organization and ease of use of their analytic support tools, including price charts, technical indicators, option analytics and profit strategy graphs.

Source:

Online Broker Ratings

Barron's Broker Rankings