Ratings Methodology for Brokers
NerdWallet rates brokers on a scale of 1 to 5 stars, with 5 being the best possible score. The ratings are incremented in tenths of a star — for example, 4.7, 4.8 and so on. Detailed information about how we rate brokers and the factors we consider in our assessments is below.
How our broker ratings work: Our ratings formula calculates a base rating for each broker overall, from 1.0 to 5.0 stars. The rating is based on core features of the broker — the factors that matter most to the average investor and directly affect how investors choose a broker and use their accounts. Those are:
Investment selection.
Trading platform.
Customer support.
Account fees.
Trading costs.
Mobile app.
How our broker ratings work: Our ratings formula calculates a base rating for each broker overall, from 1.0 to 5.0 stars. The rating is based on core features of the broker — the factors that matter most to the average investor and directly affect how investors choose a broker and use their accounts. Those are:
We then apply a standard adjustment to the final score to account for factors we consider table stakes offerings. If the broker doesn’t offer these, they do not get an adjustment. For the broker’s overall score, this standardized adjustment applies if they earn five stars in our account minimum, inactivity fee and annual fee categories, which require them to have an account minimum of $25 or less and charge no inactivity or annual fees.
Data collection and review process
We collect data from providers and observe provider demonstrations as necessary. Our process starts by sending detailed questionnaires to providers. The questionnaires are structured to equally elicit both favorable and unfavorable responses. They are not designed or prepared to produce any predetermined results. The questionnaire answers, combined with product demonstrations, interviews of provider personnel and hands-on research by our specialists, make up our proprietary assessment process that scores each provider’s performance across more than 20 factors.
The final output produces overall star ratings. Ratings are rounded to the nearest tenth. These overall star ratings appear on roundup pages and the provider’s review. We then undergo an additional evaluation process to create lists of the best brokers for certain types of consumers. This evaluation adjusts the weighting of factors (and may eliminate or add factors) to emphasize those that matter most to the consumer targeted by the list — for example, our list of the best brokers for beginners heavily weights factors like educational support and website ease of use. Because of this, a provider’s overall star rating is not always the primary factor that determines inclusion in lists or NerdWallet’s awards program.
Information updates
Factor weightings
The review team
The combined expertise of our investing team is infused into our review process to ensure thoughtful evaluation of products and services from the customer perspective. Our writers and editors together have more than 50 years of experience in writing about finance.
Account minimum
Investment selection
Trading platform
Customer support
Account fees
Trading costs
Do you want to provide feedback? Contact us at [email protected].