ZacksTrade Review – 2020

Born in 2014 from Zacks Research, ZacksTrade is a full-service broker-dealer with over 600 employees worldwide. Per its site, it’s “the second-largest independent equity research firm in North America and manages more than $5 billion in assets.” 

Zacks Research was founded in Chicago in 1978 following an influential paper on Len Zack’s innovative approach to investing. The paper, titled “analyzing earnings estimate revisions to predict stock movements” served as the starting point for the research firm. Investors using ZacksTrade get free access to Zacks Research. 

Fierce competition between online brokers has succeeded in driving prices and fees down, which greatly benefits clients. New brokerage accounts require a minimum deposit of $2,500, but Zacks charges no inactivity fees and no withdrawal fees.

Seasoned investment professionals and experienced investors will feel comfortable using ZacksTrade. Their services are ideal for investors who plan to make frequent trades, often using margin. Margin interest rates are reported to be some of the lowest in the industry, which starts at 3.5%. 

Available investments

Clients of ZacksTrade can invest in an extensive selection of investments like:

  • US and International stocks, 
  • Bonds
  • Mutual funds 
  • ETFs
  • Options 

It further breaks down the bond category to corporate and government options. In addition to the US markets, investors also have access to international securities traded on over 90 international exchanges. This is one of its main selling points as larger competitors only offer US-based investments.

Although reasonable, Zacks does charge trading fees for stock and ETF purchases. With a minimum fee of $1, US Stocks and ETFs trade for $0.01 per share. Options are also available for $1 for the first contract and $0.75 per additional contract. 

Customer service

Live brokers are available Monday – Friday from 9 AM to 6 PM ET, but only to assist users in making trades. Although they can help set up trades, these brokers aren’t authorized to give investment advice. 

Some clients have praised the customer service on TrustPilot, citing ease of use and customer service. It has a 4-star rating out of four reviews with some traders commending it for offering international investments and low trading fees.

Ease of use

Getting started is a relatively easy, but a sometimes lengthy, process. Once the online application is completed and all required documents are submitted, accounts are generally approved in 24-48 hours. The application can be lengthy and the process for determining the type of investment account required can be confusing. Additionally, to open an account an investor must document having completed  100 live trades

Luckily, Zacks offers a “paper-trading” demo account funded $1 Million, which remains open for 90 days. It is possible to fulfill the minimum trades requirement by using this simulated account. 

All Zacks clients get free access to all three of their available trading platforms:

Client Portal is Zacks basic, web-based platform. In addition to offering basic capabilities for making simple trades, clients can access the necessary documentation and manage account settings.

Zacks Trader is the next step up. It’s a browser-based trading platform with more features and functionality than the Client Portal. Zacks describes the platform as “an uncluttered trading interface that’s easy to learn, but offers advanced trading features and tools.” It works behind a firewall and also serves as a good substitute for the advanced platform for investors trading on the go.

ZacksTrade Pro is its top-level platform designed for advanced traders needing a robust set of tools, news, and analysis. This complex desktop platform is described as a “comprehensive and efficient trading workspace that lets you put all of the essentials at your fingertips.” Versatile and robust, it allows users to set up customizable alerts and automate complex options trades. Investors can also completely configure the layout and appearance of the tools, including customizing data columns and creating multiple watch lists.

Also available is an app (Handy Trader) to allow trading from mobile devices. The app isn’t quite as functional as the desktop or web-based platforms, but it’s strong enough to allow for some day trading. 

Key differentiators

Zacks offers clients several key advantages that set it apart from other discount brokers. Their customer support gives clients access to live brokers. While these brokers can’t give investment advice, they can help clients set up their trades. And for no extra charge, Zacks offers broker-assisted trades. This service can run upwards of $40 at some brokers.

Additionally, Zacks takes security very seriously. On top of 128-bit SSL encryption and a dedicated security team, all clients can get a security code generating device. This device generates a unique code to enter every time you log in. Through this, clients get an additional layer of protection against unauthorized logins.

Furthermore, Zacks customers have access to 90 international markets, making it possible to trade globally. This is quite rare as many large brokers restrict users to US investments. TD Ameritrade only lets users trade some Canadian securities, since it’s owned by a Canadian bank, Toronto Dominion.

Pros

  • ZacksTrade investors get free access to Zacks research, one of the top services for self-directed investors. 
  • Investors from around the world can join and trade on ZacksTrade’s three platforms. 
  • Broker-assisted trades are free. Most competitors charge large fees for this service.
  • While trading isn’t free, Zacks offers low trading fees and very competitive margin rates. There are also no miscellaneous fees associated with a brokerage account.

Cons

  • At $27.50, mutual fund trades are rather expensive and Zacks offers no transaction-fee-free mutual funds. Investors planning to focus on mutual funds should focus their broker search elsewhere.
  • Although the tools are robust and trading is fast, the platforms can feel slow and clunky. ZacksTrade Pro looks a bit like a terminal out of the 90s. 
  • No branch offices and no in-person service options available. 
  • Clients have no access to the forex or futures markets. Zacks also has no MetaTrader platform.
  • Lots of research is available, but not much in the way of investor education. Zacks is really for experienced traders who already know what they’re doing. 

Bottom line

Zacks offers great research and a few flexible trading platforms. It’s perfect for advanced traders who trade frequently and need a robust, customizable trading platform. Day traders who need advanced research and customizable tools will feel well served. 

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