Yesterday, hours after I wrote an article on SmartMoney’s 2012 Best Brokers Survey, in which I wondered how come Zecco and TradeKing were ranked next to each other in the magazine’s annual rating, an email from Zecco arrived, with the subject line “Zecco and TradeKing Are Merging”.
I have to say that I was more surprised by the announcement of merger than by the rankings in the SmartMoney survey because I just couldn’t understand the reason behind the latest development. To me, these two brokers are far too apart in almost every area, except online stock trading commission. One, TradeKing, has good reputation, excellent customer service, comprehensive products and tools, and user-friendly, easy to use website, while the onther, Zecco, is perhaps just the opposite. With that said, I think there are reasons how TradeKing can benefit from combining its business with Zecco’s: There are products that Zecco offers, but TradeKing doesn’t have. For example, Zecco allows its customers to trade Forex, which is not available at TradeKing; Zecco has a mobile app for both iPhone and Andriod phones, while you can only trade on iPhones with TradeKing; Zecco also has a Facebook app that lets you trade within Facebook and a web app called Zap Trade that makes trading stocks anywhere on the web possible. However, for me, none of these will make a difference because I am already a customer of both companies and, therefore, I already have access to all the tools.
But if you are a customer of either broker, what will the merger mean to you? Well, there won’t be any significant change financially since both of them charge the same commission, $4.95/trade, for online stock trades. The change will come more in the accessibility of some of the tools mentioned above. Particularly, according to the announcement I received, after the merger,
First and foremost, you’ll keep the same tools, products and services that attracted you to Zecco to begin with. And with our expanded investor community, we can deliver a new social experience that is dramatically more powerful with more diverse viewpoints and opportunities for learning.
Plus, you’ll gain important new offerings, such as access to TradeKing’s premium set of top-rated tools for options traders, Fixed Income capabilities, comprehensive educational offerings and award-winning customer service.
Depending on whom you are with now and your investment strategies, these tools may not be that helpful. I still make trades with TradeKing, but haven’t done anything with my Zecco account. Probably I should just move everything to TradeKing and close the account since I will soon have access to tools at both companies anyway.
In the press release, the companies said after the merger, the new company “would have a combined client base of approximately 500,000 accounts.” I wonder how many of those accounts come from Zecco.
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