Choosing a Broker: Three Major Platforms and Key Considerations

A common first step in investing is opening a brokerage account. Brokerage accounts allow people to buy, sell, and hold investments such as stocks, exchange-traded funds, mutual funds, and bonds.

Today’s investors can choose from numerous online and app-based platforms. This represents a significant change from the days when investors commonly relied on full-service brokers and paid substantial commissions to place trades.

Many brokerage firms now charge no commission for online trades of U.S.-listed stocks and ETFs. However, $0 commission does not mean that every transaction or service is free. Options contracts, mutual funds, broker-assisted trades, account transfers, margin loans, and certain regulatory fees may still involve costs.

Understanding Fractional Shares

Stocks traditionally trade in whole shares, but fractional-share programs allow investors to purchase a portion of a share.

For example, if a stock trades at $450 per share, an investor may be able to invest $5 rather than purchasing an entire share. The investor would then own a proportional interest in the company and generally receive a proportional share of any dividends the company declares.

Fractional-share minimums, eligible securities, order-handling procedures, voting arrangements, and transfer policies differ among brokerage firms. Fractional shares may also need to be sold rather than transferred when an account is moved to another brokerage.

Factors to Compare

No brokerage platform is the right fit for every person. Before opening an account, someone may compare:

• Available account types
• Investment choices
• Trading commissions and other fees
• Fractional-share policies
• Treatment of uninvested cash
• Research and educational resources
• Website and mobile-app design
• Customer-service options
• Branch availability
• Account-transfer policies
• Security features
• Advanced trading tools
• Margin rates
• Access to retirement accounts
• Whether the firm is a member of SIPC

The importance of each feature depends on how you’ll use the account. Someone interested primarily in long-term mutual-fund investing may evaluate a platform differently from someone interested in stocks, options, futures, or cryptocurrency.

Examples of Well-Known Brokerage Firms

Charles Schwab, Fidelity, and Robinhood are three widely used brokerage platforms. This comparison is an educational overview, not a ranking or recommendation. Products, fees, eligibility requirements, and platform features can change, so confirm current information directly with each brokerage.

Charles Schwab

Charles Schwab helped expand the discount brokerage model and has developed into a large financial-services company offering brokerage, banking, investment-management, custody, and advisory services.

Selected features include:

• $0 commissions for online trades of U.S.-listed stocks and ETFs
• Options trading with no online base commission, although per-contract fees generally apply
• Fractional shares of most U.S.-listed stocks and ETFs beginning at $1
• Stocks, ETFs, options, mutual funds, bonds, futures, and forex
• Web, mobile, and thinkorswim trading platforms
• Research from Schwab and third-party providers
• Educational articles, courses, videos, and webcasts
• Automated and professionally managed account choices
• Online, telephone, and branch-based customer service

Schwab’s thinkorswim platform includes advanced charting, screening, paper-trading, and order-entry tools. These capabilities may appeal to active traders, but beginners may need time to learn how to use them.

Schwab reported approximately 39.8 million active brokerage accounts and $13.08 trillion in total client assets as of June 30, 2026. Total client assets represent assets held across Schwab’s businesses and should not be interpreted as assets owned by the company itself.

Fidelity

Fidelity is a privately held financial-services company offering brokerage accounts, retirement plans, asset management, workplace benefits, custody services, and other financial products.

Selected features include:

• $0 commissions for online U.S. stock and ETF trades
• Options trading with no online base commission, although contract fees generally apply
• Fractional shares of eligible U.S. stocks and ETFs beginning at $1
• Stocks, ETFs, mutual funds, bonds, options, and cryptocurrency
• Fidelity mutual funds, including several zero-expense-ratio index funds
• Web, mobile, and desktop trading platforms
• Stock, fund, and ETF screeners
• Research from Fidelity and outside providers
• Educational materials and planning tools
• Online, telephone, and Investor Center assistance

Fidelity provides advanced charting, market scanners, screeners, and other research tools through its desktop platforms. It also offers a large selection of mutual funds, which may be relevant to people using brokerage and retirement accounts for long-term investing.

At the end of 2025, Fidelity reported $18.0 trillion in assets under administration and $7.1 trillion in managed assets. These are different measurements. Assets under administration include customer assets held or serviced across Fidelity’s businesses, while managed assets generally refer to money that Fidelity manages on behalf of customers.

Fidelity has also reported serving approximately 57 million customers across its businesses. However, this is not directly comparable with Schwab’s active brokerage-account total. One Fidelity customer may use more than one Fidelity service, while account-counting definitions vary among companies.

Comparing Schwab and Fidelity

Schwab and Fidelity both provide online account-opening and funding procedures, broad investment selections, research resources, educational materials, mobile applications, and customer-service options. Both companies also maintain physical branches or investor centers in various locations.

Their platforms include many of the same basic investment choices:

• Stocks
• ETFs
• Options
• Mutual funds
• Bonds and other fixed-income products
• Retirement accounts
• Managed-account services

There are also differences. Schwab provides futures and forex trading through its specialized trading services, while Fidelity offers direct cryptocurrency trading and a large lineup of Fidelity mutual funds.

The companies also differ in their fractional-share programs, trading-platform design, cash-management choices, research providers, account features, and fees for certain transactions. These distinctions may be more meaningful than the firms’ overall size.

Robinhood

Robinhood began as a mobile-focused brokerage platform centered on commission-free stock trading. Its investment and financial-product lineup has expanded considerably since its introduction.

Selected features include:

• $0 commissions for online stock and ETF trades
• Fractional shares of eligible stocks and ETFs beginning at $1
• Stocks, ETFs, options, cryptocurrency, futures, and prediction-market products
• Individual brokerage, retirement, joint, and custodial accounts
• Web, mobile, and desktop trading platforms
• Subscription-based Robinhood Gold features
• Cash-management and advisory services
• A streamlined interface designed around digital account access

Robinhood’s relatively simple interface may be easier for some beginners to navigate. Simplicity, however, does not reduce the risks associated with the investments being traded.

Options, cryptocurrency, futures, margin borrowing, and prediction-market contracts have different structures and risks from ordinary stock or ETF ownership. Anyone studying these products should understand how they work before using them.

Robinhood does not currently offer traditional mutual funds. However, investors can purchase ETFs, including ETFs designed to track market indexes. Therefore, the lack of mutual funds does not mean that index-based investments are unavailable on the platform.

Robinhood reported 29.9 million investment accounts as of June 30, 2026. Its definition includes funded individual brokerage, joint investing, IRA, custodial, and certain investment-adviser custody accounts. Because a funded customer can have more than one investment account, this figure should not be treated as the number of individual Robinhood customers.

How Brokerages Earn Money

Brokerage firms can generate revenue even when they charge no commission for online stock and ETF trades. Revenue sources vary by company and may include:

• Interest earned on customer cash balances
• Margin-loan interest
• Options contract fees
• Mutual-fund service or transaction fees
• Asset-management and advisory fees
• Subscription programs
• Securities lending
• Payment for order flow
• Bid-and-ask spreads on certain products
• Account-transfer or service fees
• Revenue from banking, retirement-plan, or custody operations

Not every brokerage uses each of these methods. For example, firms differ in whether they receive payment for directing particular types of customer orders to market makers.

The treatment of uninvested cash is another important distinction. Depending on the brokerage and account settings, cash may be placed in a money market fund, held as a brokerage credit balance, or swept into participating banks. The interest rate, insurance coverage, and availability of that cash can differ.

Understanding how a brokerage is compensated provides useful context about how commission-free trading platforms operate.

FDIC Insurance and Brokerage Accounts

Federal Deposit Insurance Corporation protection generally applies to eligible deposits held at insured banks. Stocks, bonds, mutual funds, ETFs, and other securities are not FDIC-insured.

Some brokerage firms offer bank-sweep programs that move eligible uninvested cash into one or more FDIC-insured banks. When such a program is used, applicable FDIC coverage may apply to the bank deposits, subject to program terms and insurance limits.

This is different from protection for securities held in a brokerage account.

SIPC Protection

The Securities Investor Protection Corporation helps protect customers of SIPC-member brokerage firms when a brokerage fails, and customer securities or cash are missing.

SIPC protection is limited to:

• Up to $500,000 per customer for securities and cash
• A maximum of $250,000 within that $500,000 limit for cash held for the purchase of securities

The applicable limit can depend on how accounts are registered. Accounts held in different legal capacities may receive separate protection, while accounts held in the same capacity may be combined.

SIPC does not protect against:

• Declines in investment value
• Poor investment decisions
• Securities that become worthless
• Misleading investment advice
• Investment performance that does not meet expectations

SIPC is also not the same as FDIC insurance. Its purpose is primarily to help restore missing customer securities and cash during the liquidation of a failed SIPC-member brokerage.

Before opening an account, an investor can verify a brokerage firm’s SIPC membership directly through SIPC.

Mark Notes

A brokerage account provides access to investments, but the account itself does not determine whether an investment is appropriate or how it will perform.

Platform design, research tools, fractional shares, and commission policies can make investing more accessible. They do not eliminate market risk. Comparing fees, investment choices, cash policies, account protections, educational resources, and service options can help someone understand how different brokerage platforms operate.

This overview is provided for educational purposes only and does not constitute financial advice, an endorsement of any brokerage firm, or a recommendation to open an account or purchase any investment. Brokerage features, fees, account totals, and product availability can change. Information should be verified directly with each firm before making financial decisions.