Firstrade Review 2019 – Good Broker for Non-US Residents

Firstrade Securities is an online discount broker headquartered in Flushing, New York. They offer a standard range of investment products including stocks, options, ETFs and mutual funds. The brokerage was founded in 1985 by John C. Liu and was initially called First Flushing Securities. In 1997, they launched their online trading platform to capitalize on the huge number of people looking to trade stocks. Firstrade claim their USPs is their quality customer service, cheap commission rates and catering to oversea customers. Despite offering low-fee’s and good service, they are well behind major brokerages such as Etrade and Interactive Brokers. 

There are three different premier account levels – Blue, Gold and Platinum. Basically the more money you have, the better you will be treated. $2,000 is the minimum amount required to sign up for the Blue account and in return you receive free streaming market quotes & data. To achieve Gold status, deposit at least $50,000 and get a dedicated account manager. In addition you receive discounts on internal asset transfers and verification letters. Clients with accounts over $100,000 qualify for the Platinum account and receive multiple free bonuses that Blue and Gold members pay for. To receive these benefits, you have to meet the different commission requirements per month. For Blue its $100, Gold is $500 and Platinum at least $1,000. So this means you need to be an active trader and maintain a certain account balance to retain your status. 

Fees & Commissions

Firstrades commission rates are competitive with the top online brokers and have a zero dollar account minimum. They recently lowered their fee’s by $4! In comparison, TD Ameritrade and Etrade charge $6.95 for stock orders but have faster executions.

  • Stocks and ETFs: $2.95 + $0.005 per share for stocks under $1. 
  • Options: $2.95 plus $0.50 per contract for market and limit orders.
  • Mutual funds: $9.95 for no-load funds, $0 for load funds. 
  • Broker Assisted trades $19.95 and options contract charges.
  • Bonds: net yield basis.
  • Fixed Income products are charged on a net yield basis apart from primary market CD’s costing $30. 

how firstrade fees compare with other discount brokers

Trading Platform

As mentioned before, Firstrades platform is their main downside and is in desperate need of a revamp. The X-Stream tool provides live streaming quotes and market data but looks outdated. The main problem is the quotes are static, meaning you have to refresh your browser to see the latest stock prices. Traders should be able to see quotes in real-time, making it easier to enter and exit trades in an instant. Also X-Stream’s charts are limited with no options to customize and very few technical indicators to pick from. Some others features include stock screeners, stock alerts by SMS, S&P research reports and the latest information on IPO, splits and earnings calendars. None of these features are state of the art and you can find them on most investment websites. I don’t recommend using Firstrade until they improve their software as poor executions will cost you profits in the long run. The online brokerage market is fiercely competitive and the best brokers are releasing new tools and software updates every few months. 

Advantages

  • Cheap commissions with no hidden fee’s, everything is explained on the website.
  • Accept non-US residents which is rare for US brokerages because of regulations with international investors. This makes Firstrade a suitable option for oversea customers based in Ireland, UK and Australia along with 17 other countries.
  • Website user interface is easy to navigate.
  • No minimum to open an account.
  • 10,000 mutual funds and fixed income investments to choose from.
  • Now provide extended hours trading.
  • Language support for Chinese market.
  • No annual, setup or termination fees for IRA accounts.
  • Twelve ETFs are commission free.
  • Free dividend reinvestment program.

Disadvantages

  • Surcharges for stocks below $1.
  • Mobile app is unsecure and not very user friendly.
  • Low quality trading software badly needs an upgrade.
  • Lack of tools for research and limited education provided. The training videos explain the basic of the stock market and don’t cover topics in depth. Luckily, the internet has so many free resources for learning about finance.
  • Don’t offer 24 hour customer service.
  • Don’t allow Forex trading.
  • Short-term redemption fee of $19.95 applied to redemptions of no-load fund shares held less than 180 days.

 

Summary

Firstrade is one of the lesser-known brokerages operating in the United States. Its difficult to find any real reviews from previous clients. While they offer cheap commissions their platform is lagging behind competitors. This is a deal breaker in my eyes! They seem oblivious to competition and need to innovate to survive in the long-term. To be fair they are very cheap, $2.95 per trade for stocks and ETFs is inexpensive. However, they have a $0.005 cent surcharge for shares under $1 and any orders over 5,000 shares. Their variable commission structure is not suitable for penny stock traders. Despite their drawbacks the company does accept non-US citizens and caters to a wider audience. This a huge positive as its difficult for people in the UK to find brokers that accept international traders. Firstrade remind me of an old, beat up car that’s not nice to look at but gets the job done. Therefore, I recommenced saving up your money and using a more reputable brokerage.

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