With data breaches reaching an all time high of 783 in the US in 2014, according to the Identity Theft Research Center, online brokerage firms are striving more than ever to stay on top of security measures. The winners of Barron’s 2015 Best Online Brokers are no exception, placing much of their focus on technology, accessibility, and protecting user data.
Barron’s looked at brokers’ security offerings, mobility, and social media, as well as their investment tools and trading options, to come up with the top three online brokers of the year:
Leading the pack with four and a half stars and the highest overall score, Interactive Brokers, run by chairman Thomas Peterffy, shone in terms of security with their use of read-only passwords, a relatively new development in online brokerage security. When users are entering information into sites like SigFig or apps like Mint, which evaluate portfolio holdings and make suggestions, a read-only password will protect user information by only allowing the app or website to see your account but not make changes. This security measure is still fairly rare, but it’s possible to ask your broker to use one for your account.
After a successful merger with tradeMONSTER, OptionsHouse, led in part by Rene Kern of General Atlantic, has improved its offerings using the technology tradeMONSTER brought to the table. Its Trade Journal was rated by Barron’s as the best in its class, allowing users access to key market statistics, and its Follow Alerts keep you up to date via popup, mobile, or email. In addition, OptionsHouse is a member of the Securities Investor Protection Corporation (SIPC), a form of security that protects user accounts for up to $500,000.
Barron’s evaluated TD Ameritrade’s website and new “thinkorswim” platform, finding both excellent. Under the leadership of CEO Fred Tomczyk, TD Ameritrade set new records for daily average revenue trades, total client assets, and net new clients in 2014. Their website includes free downloads of security software and an explanation of their Asset Protection Guarantee. They also actively use social media to inform investors about security options and trade innovations.
In the wake of the security issues of 2014, more and more online brokers are seeking to make security, in addition to investment options, a major part of their services. Whether it’s the use of sophisticated encryption or instilling in their employees the importance of preventing unauthorized access to accounts, online brokers are striving to find ways to offer convenient—and secure—service to a rapidly expanding audience.