The bottom line: T. Rowe makes a fine choice for investors who want to build a fund-only portfolio. But stock investors will be turned off by the firm's trading costs and account fees on the brokerage side.
T. Rowe Price
no promotion available at this time
Pros & Cons
Low-fee mutual funds.
Fund screening tools.
Free retirement investing tools.
High account minimums.
Compare to Similar Brokers
no promotion available at this time
2 Free Stocks
after opening and funding an account.
no promotion available at this time
Get more smart money moves — straight to your inbox
Become a NerdWallet member, and we’ll send you tailored articles we think you’ll love.
When it comes to high-quality, low-cost mutual funds that deliver superior long-term performance, Vanguard may be the crowd favorite, but T. Rowe Price deserves a round of equally enthusiastic applause. Add in the firm's sophisticated retirement planning calculators, and T. Rowe makes a fine choice for investors out to build a fund-only portfolio.
It's a completely different story for stock investors. Trading costs and account fees on the brokerage side make T. Rowe a much less appealing choice compared to other brokers that cater to the stock jock crowd. To be fair, this is not the firm's target audience, so we based the bulk of our evaluation on T. Rowe Price's retirement offerings. Stock traders should point their browsers elsewhere (starting with NerdWallet's roundup of best online brokers for stock trading) to find a more appropriate provider.
T. Rowe Price is best for:
Long-term mutual fund investors.
Direct access to T. Rowe Price funds.
Free retirement planning tools.
T. Rowe Price at a glance
$2,500 ($1,000 for IRAs)
Stock trading costs
$19.95; $9.95 for active traders (more than 30 trades in prior 12 months) and Select Client Services members.
$19.95 + $1 per contract; $9.95 + $1 per contract for active traders (more than 30 trades in prior 12 months).
Account fees (annual, transfer, closing, inactivity)
$30 annual fee on brokerage, waived if certain conditions are met; $50 account transfer or termination fee.
Number of commission-free ETFs
Number of no-transaction-fee mutual funds
• Stocks. • Bonds. • Mutual funds. • ETFs. • Options.
Basic research, analysis and screening tools.
One app: T. Rowe Price Personal app available for iPhone and Android.
Research and data
Research and news available from Interactive Data, FactSet, The Associated Press, T. Rowe Price and Midnight Trader.
Customer support options (includes website transparency)
Brokerage Customers: Weekdays: Phone 8 a.m. to 8 p.m. ET, email
Where T. Rowe Price shines
High-quality, low-cost mutual funds: Price and performance go hand in hand. More specifically, a fund’s cost — the expense ratio — is tied inextricably to the returns it delivers to investors. On both these measures, T. Rowe Price funds shine. As of September 2020, over 70 of T. Rowe's funds have earned four or five star Overall Morningstar Ratings.
T. Rowe also offers a lineup of more than 130 no-load mutual funds, which is in keeping with founder Thomas Rowe Price Jr.’s position that fees should be based on the assets under management, not charged as a commission — that is, an upfront or back-end sales load.
Another attractive feature is the firm’s selection of no-transaction-fee mutual funds, which totals approximately 3,000, and its lineup of 300 commission-free ETFs.
Direct investment access to T. Rowe’s fund lineup: A bonus for T. Rowe customers: Buying the company’s own funds right from the source, instead of through another brokerage, means you avoid paying any transaction fee (no commissions!) and any markup charged by a middleman.
Note on account setup for new customers: T. Rowe Price funds are sold directly, not through the company’s brokerage, and held in a separate retail account. If you want to buy non-T. Rowe funds and any stocks or ETFs through the company, you’ll need to set up a T. Rowe brokerage account.
Fund screening and retirement planning tools: This is where T. Rowe Price really shines for mutual fund investors. Morningstar’s Portfolio Manager allows customers to create a portfolio or watch list to monitor and dig deep into a fund’s performance and underlying holdings. T. Rowe’s Mutual Fund Research Tool makes it easy to research funds by family, ratings/rankings, management and objective and prices/yields.
Particularly noteworthy are a few retirement tools that can help you figure out retirement income needs and test the overall health of your retirement savings. They’re available to the public for free, though you must register as a guest on the site, which will save your inputs:
The retirement income calculator projects your monthly spending money in retirement based on your current savings and other inputs.
FuturePath is a sophisticated but easy-to-use retirement planning simulator that offers an impressive level of customization. T. Rowe's standout tool starts with all the standard inputs: salary, current retirement savings and contributions, desired retirement age. It then uses Monte Carlo analysis, running 1,000 market performance simulations, to calculate the probability that you'll achieve your financial goals. What makes FuturePath better than similar calculators is that it allows users to add important plan-changing events such as future income streams, like a one-time windfall from selling a business or home; ongoing income from employment or a rental; and future expenses such as major purchases, health care costs and college tuition.
Where T. Rowe Price falls short
Stock and ETF trading costs: The company’s $19.95 stock and ETF trading commissions are at the high end of the spectrum, especially when compared with other fund-centric companies like Fidelity and Charles Schwab that charge $0 per trade.
Investors can cut the commission in half to $9.95 a trade by making more than 30 trades a year or being enrolled in T. Rowe Price Select Client Services (which requires having at least $250,000 in assets in T. Rowe accounts).
» Looking to trade stocks? See the best online brokers for stock trading
Minimum initial investment requirements: There’s no reason to delay investing because you can’t meet a firm’s minimum initial investment requirement. If T. Rowe’s $1,000 initial deposit to open an IRA (and $100 minimum to add to an existing account) or $2,500 to open a nonretirement brokerage account is too big a hurdle, there are plenty of other brokers with a lower bar.
Account fees: Here again, T. Rowe’s terms and conditions for mutual fund accounts and brokerage clients could be a turnoff. The company charges an annual service fee of $20 on mutual fund accounts with balances below $10,000; that charge can be waived by subscribing to electronic delivery of statements or maintaining a balance of at least $50,000 across all T. Rowe Price accounts.
There is also a $30 annual fee on brokerage accounts to customers who do not qualify for Select Client Services. Otherwise, to avoid the fee, you must have made five or more commission-generating trades in the previous year or hold $50,000 or more in T. Rowe mutual funds.
Is T. Rowe Price right for you?
T. Rowe Price’s mutual funds are its bread and butter, and that’s where the company shines. If you’re primarily a mutual fund investor, the company’s array of no-load, low-expense-ratio funds can deliver a “whole portfolio” solution at a low cost — especially if you meet the terms to waive annual account fees. Outside of that, most customers will be better served by other brokers.
Dayana Yochim contributed to this review.
Disclosure: The author held no positions in the aforementioned securities at the time of publication.
How do we review brokers? Here’s our methodology.
NerdWallet’s comprehensive review process evaluates and ranks the largest U.S. brokers by assets under management, along with emerging industry players, using a multifaceted and iterative approach. Our aim is to provide an independent assessment of providers to help arm you with information to make sound, informed judgements on which ones will best meet your needs.
DATA COLLECTION AND REVIEW PROCESS
We collect data directly from providers, and conduct first-hand testing and observation through provider demonstrations. Our process starts by sending detailed questionnaires to providers to complete. The questionnaires are structured to equally elicit both favorable and unfavorable responses from providers. They are not designed or prepared to produce any predetermined results. The questionnaire answers, combined with product demonstrations, interviews of personnel at the providers and our specialists’ hands-on research, fuel our proprietary assessment process that scores each provider’s performance across more than 20 factors. The final output produces star ratings from poor (one star) to excellent (five stars). Ratings are rounded to the nearest half-star.
Evaluations vary by provider type, but in each case are based upon the weighted averages of factors that include but are not limited to: advisory and account fees, account minimums and types, investment selection, investment expense ratios, trading costs, access to human financial advisors, educational resources and tools, rebalancing and tax minimization options, and customer support including branch access, user-facing technology and mobile platforms.
Each factor can involve evaluating various sub-factors. For instance, when gauging the investment selections offered by robo-advisors, 80% of the score is based on the potential for diversification (how well-diversified a resulting portfolio of investments could be) combined with the availability of specialty portfolios and level of customization for investors. Expense ratios form an additional 10% of the score, and low or no management fee the remaining 10%.
The weighting of each factor is based on our team’s assessment of which features are the most important to consumers and which ones impact the consumer experience in the most meaningful way. The factors considered, and how those factors are weighted, change depending upon the category of providers reviewed.
Writers and editors conduct our broker reviews on an annual basis but continually make updates throughout the year. We maintain frequent contact with providers and highlight any changes in offerings.
THE REVIEW TEAM
The review team comprises seasoned writers, researchers and editors who cover stocks, bonds, mutual funds, index funds, exchange-traded funds, alternative investments, socially responsible investing, financial advisors, retirement and investment strategy on a daily basis. In addition to NerdWallet, the work of our team members has been published in The New York Times, The Washington Post, Forbes, USA Today, Bloomberg News, Nasdaq, MSN, MarketWatch, Yahoo! Finance and other national and regional media outlets.
The combined expertise of our Investing team is infused into our review process to ensure thoughtful evaluations of provider products and services from the customer perspective. Our writers and editors combine to have more than 70 years of deep experience in finance, ranging from a former Wall Street Journal reporter to a former senior financial advisor at Merrill Lynch.
CONFLICTS OF INTEREST
While NerdWallet does have partnerships with many of the reviewed providers, we manage potential conflicts of interest by maintaining a wall between our content and business operations. This wall is designed to prevent our writers and the review process from being influenced or impacted by our business partnerships. This way, all reviews can provide an unbiased review that serves the interests of our users. For more information, see NerdWallet’s editorial guidelines.