In this Firstrade review, I take an up-close look at one of America’s consistently best-rated online brokers.
Firstrade is one of the older US financial institutions offering a web trading platform, having launched Firstrade.com in the ancient pre-history that was 1998. A lot has changed since the 90’s and in this review, I will be looking beyond the hype and seeing if this broker has managed to stay the pace or whether it should go the way of other late 90’s dot coms.
More importantly, I hope my Firstrade review will help you decide whether they are the right choice of trading platform for you.
Who is Firstrade
Firstrade was founded in 1985 in the bustling Asian-American borough of Flushing, New York, making it a veritable and venerable grandparent in comparison to some of the other brokers available.
Firstrade was one of the first brokers to offer targeted services to users with a strong emphasis on serving the financial needs of the local Asian communities. Thanks to its strong focus on providing for the needs of local communities, it soon gained a reputation as one of the best discount brokers in the US. Whilst Firstrade fees remain some of the lowest available, the company has stayed true to its roots, providing trading tools and support in English and simplified Chinese to this day.
Apart from its community first focus, Firstrade also stands out with its unique securities lending program. This program is available to investors interested in generating extra revenue streams by lending out their stock to other financial institutions. This is a great value-adding feature and is perfect for independent investors with large accounts.
Firstrade is a reputable broker offering a range of features and services that will appeal to both new and experienced investors. The company was founded in 1985 by Asian-American, John Liu, as First Flushing Securities. In 1997, the company was renamed Firstrade Securities Inc., and in 1998 the company launched Firstrade.com.
With over four decades of experience, Firstrade provides a streamlined trading experience to customers all across the US as well as further afield.
Who owns Firstrade
Firstrade was founded by John Lio in 1985, who continues to serve as the company CEO to this day.
As of 2017, Firstrade is a wholly-owned subsidiary of the Firstrade Holding Corporation.
- Commission-free stock and options trades
- Commission-free trading on mutual funds
- Excellent selection of research tools
- You can only trade on US markets
- No 24/7 support
- Slightly basic trading platforms
Who is Firstrade suitable for?
Thanks to its zero-commission trading offering, Firstrade’s platform has become a popular choice for beginner investors.
The company is also particularly popular with mutual fund investors, as well as options traders. The trading platform offers investors access to stocks, ETFs, mutual funds, fixed-income securities, options trades, and cryptos.
Investors of all levels are well served as Firstrade offers investors a wide range of financial products and services on its trading platform.
Firstrade Accounts and Products
Firstrade offers its customers two different accounts, namely brokerage accounts and retirement accounts.
A brokerage account is available either as an Individual or Joint account. This type of account is best suited to those looking to generate wealth as it provides access to a wide selection of different asset types and financial products.
Advanced traders are well catered for with stocks, bonds, mutual funds, ETFs, options contracts and cryptocurrencies; a robust selection that will be more than enough for most investors. However, you won’t find forex or futures here.
Firstrade retirement accounts are available as either a Traditional, Roth, or Rollover Individual Retirement Accounts (IRA). Each of the IRA accounts comes with its own unique set of tax perks and advantages. If you are unsure which account is best suited to you then take the time to familiarize yourself as they all offer a tax incentivized way of saving for your pension.
Regardless of what account suits your trading needs, you will be able to take advantage of low and no trading fees, as well as being able to invest in a comprehensive range of financial products.
Firstrade Review: Fees and charges
Firstade was one of the first online brokerages in the US to offer no commission trading fees and continues to be at the forefront of low-cost and high-value customer focused brokerage.
I believe that if you are looking for a low-cost provider, and if fees are your bottom line, then you will find that Firstrade charges some of the lowest rates in the US.
During my Firstrade review, I was impressed by the fact that they offer a range of commission-free services, including broker retirement accounts. This is on top of their already impressive list of zero fees, such as commission-free options trading, as well as the usual commission-free suspects of stocks, ETFs, and even a range of mutual funds. That’s right, there are no-fee mutual funds available on Firstrade. Admittedly, this is for a select range of funds, but with over 12,400 commission-free mutual funds, the choice should be more than enough for those looking to invest in mutual funds.
Also, Firstrade does not charge a per-contract fee for options trading. Most other brokers are only too keen to charge account holders per-contract fees and the fact that Firstrade doesn’t really stands out.
So overall, Firstrade really is a discount broker and is among the lowest, if not the lowest, brokers in the US. That said, there are a few things you should be aware of. First of all, account transactions, such as outgoing wire transfers, are subject to a $25 fee. Also, Automated Customer Account Transfer Service transfers (ACATs) are subject to a $75 fee, and partial ACATs are billed at $55.
Lastly, I should warn you that mutual funds are subject to a Short Term Redemption Fee of $19.95, if mutual fund shares are held for a period of less than 90 days. For most individuals engaged in mutual fund trading, I do not believe this is a major issue.
Platforms available at Firstrade
Firstrade offers two different platforms suited to the needs of a wide range of investors.
In my Firstrade review, I will now take a closer look at the traditional desktop platform and check out the mobile app experience for you.
Before I go into details, both Firstrade platforms provide you with the basic tools needed to safely trade online, as well as review your positions, gains and losses, and even account history.
The classic desktop experience provides a fairly decent trading platform that gives you access to all the trading tools needed. The platform had a complete redesign recently and it shows, with efficient HTML 5.0, ensuring a clean, intuitive and well-designed experience. Trading stocks should be a breeze on this platform, even for beginners.
The Firstrade mobile app is available for both Android & IOS users and has been designed to provide quick access to your Firstrade account, wherever you go. Firstrade’s mobile app offers a streamlined and easy-to-use experience. I feel that the mobile experience is decent and great for more active traders, especially as accessing data and executing trades is extremely simple.
Firstrade Services & Tools
Firstrade is a relatively no-frills brokerage provider, but unlike a lot of its low-cost competitors, I have to say that the services and tools on offer are actually rather good, especially the impressive, Firstrade Navigator.
The Quick bar is a rather neat feature that is located at the bottom of the account dashboard, no matter which of the trading platforms you are on. This handy order entry panel stays on the bottom of your screen no matter where you go on the site and makes executing trade orders fast and easy, wherever you go.
Firstrade offers the Firstrade Navigator platform free to users who have an account balance over $10,000. This clever piece of software is an essential tool for larger accounts as it allows you to view your positions and balances, and trade in your accounts in one screen. Best of all, it is fully customizable with drag-and-drop information, charts and tracking.
Finally, there is the Options Wizard, which is designed to make advanced trading strategies as easy as possible. With the ability to search options trades via expiration date or strike price at just the click of a mouse, this tool really shines.
For those wanting to play around with more advanced trading strategies, there is a strategy constructor where you can create a custom strategy based on outlook (ie. a bull, normal, or bear position). I found this tool to be a real asset as it gives you the tools needed to try out complex trading ideas or calculate margin rates, and really sets Firstrade apart from other brokers.
How to open an account at Firstrade
The process of opening an account with Firstrade is relatively simple and should take you no more than fifteen minutes.
To open an account simply go to their website and click on the Open An Account tab. You can also download the Firstrade app on Chrome or iOS, but the process will be the same regardless. Once you start the application you will be asked to provide your personal data; select the account type and currency you want, and then complete a trading survey.
These surveys are fairly standard with most brokerage platforms and are used to assess your risk tolerance as well as your trading knowledge.
After completing the forms, you will be asked to confirm your identity and provide a proof of address. You can do so either by emailing the relevant documents, or if you still live in the 1990s, you can fax them over.
Once all the documents have been provided, Firstrade will be able to verify your account, which should take no more than three days, and afterwards, you will be able to deposit money into your account and start trading.
Deposit & Withdrawal process at Firstrade
In order to make deposits or withdrawals funds with your account, you will first need to ensure you have a verified bank account and link it to your Firstrade account.
To deposit funds into your account you simply need to log-in to your account and click the Deposit tab. Before confirming the transaction, you will be asked to preview the information and then confirm your decision.
You can only deposit funds by means of an electronic transfer, but the good news is that there is no account minimum.
To withdraw money from you account you will need to log-in to your account and click the Withdraw tab. Once selected, you will again have the chance to preview the information and will be asked to confirm your decision.
You can withdraw funds from your account either by means of electronic transfer, check, or wire. Though, only US residents are able to submit a withdrawal request by check.
Customer Support at Firstrade
Firstrade customer service and support is available through email and phone, Monday through Friday, 8 a.m. to 6 p.m. Eastern Standard Time.
Customer support is a definite weak spot for this broker, though most brokers in the low-cost segment cut corners here also.
That said, their phone line is poorly-rated, with many complaining of the service being slow and not very useful. The email service is slightly better, but again it will take a fair bit of time to get a response.
Lastly, customers can avail of the Help Center, which is a database of various resources, though this will be of no use in helping you resolve any specific issues you may be experiencing.
I have to say that I was quite impressed with the solid research tools available with Firstrade. A lot of other low-cost brokers and brokerage platforms treat this as an afterthought but in my opinion, Firstrade are not cutting any corners with their selection of research resources.
Firstrade offers a comprehensive array of online stock research tools for both desktop and mobile app to help customers build robust investment portfolios and execute trading ideas. Tools, such as the already mentioned Options Wizard, are genuine assets and other tools, such as the Sectors & Industries Stock Research Tool, help to eliminate a lot of the guesswork from trading.
I hope my Firstrade review has helped highlight the strengths of this broker, which does a lot of things really well, including providing a comprehensive range of education material and resources.
The Firstrade Education Center covers almost every trading topic I could think of. Whether it’s complex subjects, such as margin rates, ETF trades, or just stock and options trades in general that you want to learn about, you will find clear and comprehensible resources.
Clicking on the topic in question, for example options trades, opens up the relevant page where the benefits, risks, strategies, tutorials, and even glossaries pertaining to the topic are listed.
Firstrade is regulated by the Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA). Furthermore, clients are covered by the Securities Investor Protection Corporation (SIPC), which offers investor protection to the amount of $500,000, which includes $250,000 for cash.
But be advised that not all investments are covered by SIPC. Generally speakingSIPC only covers notes, stocks, bonds, mutual funds and other investment company shares, and other registered securities.
In addition, Firstrade’s clearing firm, Apex Clearing Corporation, has an additional insurance policy through a group of London Underwriters to supplement SIPC protection. The additional insurance policy provided by Apex Clearing Corporation, is known as “excess SIPC,” and is used in the event of the SIPC limits being exhausted.
As with other brokers, FIrstrade uses the highest standards of data encryption to ensure that your personal data is safe from hackers. Personal and account data is stored on secure services which use industrial strength firewalls and encryption technology to protect personal information.
The mobile app is designed to make commission-free trading fast, easy and, most importantly of all, safe. As such, customers have the option to also enable two-factor authentication on their accounts to provide a further layer of security.
FAQs about Firstrade
Is Firstrade legitimate?
Yes, Firstrade is a legitimate and well established broker. As well as being overseen by all the relevant US regulators, they offer customers additional insurance, courtesy of Apex Clearing Corporation.
Can you day-trade on Firstrade?
You can day-trade on Firstrade as long as you have a minimum equity of $25,000. Accounts with lower equity will not have day-trading buying power.