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Muriel Siebert Review

SiebertNet the on-line brokerage firm owned by Muriel Siebert which is named after its founder Ms. Muriel Siebert often viewed as “The first woman of finance”.  Having been inducted into the American Business Hall of fame she was the first female member of the New York Stock Exchange (NYSE). The company still remains the only female owned broker on the NYSE.

Through its platform the company offers trading in several investment products like stocks, options, no-load mutual funds, and exchange traded funds (ETFs). The commission structure and other requirements are as follows:

  • Stocks and ETFs can be traded for $14.95 per trade if less than 1000 shares of stock are traded. An additional surcharge of $0.015 per share applies if the no of shares traded exceeds 1000.
  • Options can be traded for $1-$2 per contract that is determined by the trade size and the underlying option price. A minimum charge of $34 is set for option trades with a 10% discount given to on-line option trades. Assignment and exercise fees are additional.
  • Mutual funds can be purchased and sold for 35 per order. The company offers over1700 no load funds.
  • Corporate bonds can be traded for $2.50 per bond if the number of bonds exceeds 100, when the number of bonds is between 50 and 99 the commission rises to $3 per bond, this further rises to $3.50 per bond if the no of bonds traded is less than 50. A minimum commission of $35 applies to listed corporate bonds.
  • Annual fees of $30 apply to IRAs. The fee is waived if the total assets in the account exceed $10,000. A termination fee of $50 is charged at closing.

 

 

.Key Features:

 

  • No minimum deposits.
  • Telephone and email customer service support.
  • Wide range of investment products offered that include stock and ETF trading, options trading and trading in a wide range of fixed income investments.
  • Independent research tools offered to its clients
  • Range of mutual fund offerings to choose from.

Advantages:

  • Wide range of fixed income investments.
  • Very good customer service.
  • Free dividend reinvestment.
  • No inactivity or maintenance fees.
  • Low margin rates.
  • Independent research is offered to its clients.

Drawbacks:

  • The commission rate of $14.95 charged for stock and ETF trades is quite expensive and the firm is one of the most expensive in terms of commissions charged for all investment products.
  • An additional surcharge of $0.015 per share is levied while trading stocks if the number of shares exceeds 1000.
  • High IRA annual fees.
  • Outdated website that lacks investor appeal.
  • The company does not offer trading in futures and forex which are becoming increasingly popular with traders..

Peer Comparison:

When compared to the leading player in the industry Charles Schwab (NYSE:SCHW) Stockbrokers.com rates SiebertNet well below on the commissions incurred by the end user. SiebertNet also ranks significantly lower than Charles Schwab in several key areas such as the range of investment offerings, the available research tools, customer service, the ease of use, education of its users and mobile trading facilities.

When compared to E*TRADE Financial Corporation (NASDAQ:ETFC) SiebertNet fell behind in all the above areas rating much lower on its offerings despite the wide range of investments offered.

When compared to rival ShareBuilder SiebertNet ranks less favorably on the commissions charged and the mobile trading platform provided to its clients.  SiebertNet however does much better on its range of investment offerings. Both companies rate equally in other areas such as the available research and education tools and the ease of use.

SiebertNet ranks below its rival Scottrade when rated on the basis of its mobile trading platform, ease of use, customer service provided, commissions charged and its investment research capability. It matches Scottrade only on the wide range of investment choices offered to its clients.

Summary:

SiebertNet is an on-line brokerage firm that primarily distinguishes itself from its rivals on the wide range of investment alternatives it offers its investors. It is one of the few brokers that offer a broad choice of fixed income investments. It also offers dividend reinvestments. The firm primarily attempts to target high net worth individuals.

SiebertNet is also known for its very good customer service. It also offers quality independent research to its clients. However its fee structure is among the highest in the industry across a wide range of asset classes and this causes it to rate well below its industry rivals.

The biggest disadvantage of SiebertNet is that the commission charged for stock and ETF trades is very high. Significantly higher surcharges apply when trading a large amount of shares. The company rates as the most expensive broker on the street on its fee structure across a wide range of investments offered in a Barron’s 2010 survey. Additionally the trading tools offered are sub par at best.

SiebertNet does not currently offer its users trading in futures, or forex which are two investment classes gaining in popularity with traders. This combined with the high fee structure means its offerings are largely inadequate for real time trading. The company charges very high annual IRA fees. Thus it is not suitable for retirement accounts.

The company thus has a lot to do before it can be successful in a highly competitive industry with low margins.  The company has to wake up to the reality that its cost structure is way to high to attract new clients no matter how sophisticated they may be.

To compete effectively with its rivals the commissions charged by the firm must be drastically reduced and enhanced trading tools must be made available to its clients. While its range of investment offerings is noteworthy it falls behind in several other areas like trading and retirement accounts. There are other top brokerage firms like Charles Schwab and E*TRADE that offer competitive commissions, wider investment options, and are free from the excessive costs that Muriel Siebert users experience.

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