If you bank with Wells Fargo and keep a low-activity portfolio, WellsTrade might be a useful platform on which to trade stocks and other securities. Current clients can use the trading screen to see all of their finances, banking and investments alike, in one place. Investors who do relatively few trades might find this particularly useful. For other investors, WellsTrade probably isn’t the best tool on the market. Its research options are limited, and it lacks some asset classes that will appeal to more sophisticated investors. Pound for pound, such investors can probably do better. It may behoove those seeking hands-on guidance to enlist the services of a trusted financial advisor.
Services & Features: What Does WellsTrade Offer?
WellsTrade is an online investment platform that allows you to trade many, but not all, mainstream financial products. It is the main retail investment tool of Wells Fargo Bank.
The big selling point of WellsTrade is its integration with Wells Fargo banking, a feature known as Wells Fargo One Stop. For investors who also bank with Wells Fargo, this automatically links all of your accounts so that you can see your entire financial picture at once. This is a helpful tool in that it creates a single source for personal finance, and it may be of value to investors looking to prioritize ease and convenience in their financial toolkit.
However, One Stop offers little more than the ability to do in one browser tab what other platforms can accomplish in two. Instead of needing to have your banking open in one window and your trading platform open in a second, you can have that information on a single page. This is a neat interface utility, but it is ultimately not worth choosing a trading platform on the convenience of not having to hit Alt-Tab quite so often.
Wells Fargo supports most, if not all, of the assets that a retail investor will look to trade. This includes: stocks, exchange-traded funds (ETF), options contracts, bonds and mutual funds. Most notably it does not support trading in futures, currencies or cryptocurrency. These are not exotic assets and may be of interest to experienced investors, however, it is worth noting that relatively few ordinary investors will miss them. Futures contracts are extremely dangerous for inexperienced investors, given their high risk of loss, and both crypto and foreign currency are some of the most volatile segments of the market.
WellsTrade offers the basic set of technical analysis tools that an investor should come to expect, with information ranging from pricing data, trading volume, volatility information and more. Your options for creating customized data sets to compare information are relatively limited, however, whether you are trying to compare data across assets or within a single product.
The platform also offers a reasonable amount of fundamental analysis. This includes Morningstar research, news articles and original analysis from Wells Fargo itself. While this, too, is useful, it is also more limited in both scope and volume than investors would typically find on a competing full-service platform.
Long-term traders will generally like WellsTrade’s options for mutual funds. The firm has several thousand to offer. At time of writing investors could choose from more than 4,000 funds on this platform, with more than half of them on the no-fee list.
More active traders will likely find the platform somewhat limiting. WellsTrade supports all common transactions, such as limit or stop-limit orders. However, its trading interface often doesn’t support more sophisticated transactions such as conditional stock purchases or multi-leg options contracts. While an investor can often work around these limitations, it will prove frustrating for more sophisticated traders.
Fees: How Much Does WellsTrade Cost?
As an investor you should generally look for four types of fees attached to an online trading platform:
Trading Fees – Any charge attached to each trade that you make. This can come in the form of a flat fee, or more often will be based on the “spread.” This is the difference, if any, between the buying and the selling price of an asset.
Trading Commissions – This is when a broker will charge you a percentage based on the volume or value of each trade, based on the value of assets in a specific investment, or based on the total value of assets in the portfolio.
Inactivity Fees – Any fees that the broker charges you for not trading, such as if it charges you for keeping money in a brokerage account.
Non-Trading/Other Fees – Any form of fee for trading on this platform not covered above. For example, a brokerage might charge you for making deposits into your brokerage account or taking money out.
WellsTrade is one of the more expensive full-service trading platforms on the market.
For ordinary stocks and ETFs, WellsTrade charges $0 in commission, joining the general trend of all similarly situated trading platforms. However, for all penny stocks (those priced at less than $1.00) the platform charges the greater of $34.95 or 3.5% of the total value of the trade. For options contracts WellsTrade charges a flat $5.95 plus an additional $0.70 per contract.
Mutual funds not on the no-fee list cost $35 to trade, while bonds typically cost $50 per trade. Margin trading begins at the Wall Street Journal’s Prime Rate plus 5.75%.
WellsTrade offers broker-assisted trading for any of these transactions for an additional $25, except for mutual funds, which do not incur any additional cost.
WellsTrade does not have a minimum account balance but it does charge a $30 annual fee, with some exceptions such as for high-value accounts. Transferring your money out will also incur additional fees, typically $95 per transfer. Most full-service trading platforms do not levy these charges.
Effectiveness: How Well Does WellsTrade Work?
WellsTrade has a fairly basic and utilitarian design. The interface is built around radio buttons and clear, simple choices. Asset screens present the basic information, such as pricing and trading activity but do so in a way that is similarly stripped of complexity. For example, a default chart on this platform is a simple line graph rather than the more complicated candlestick charts commonly relied on by traders to give context to the data.
This is a common experience across the WellsTrade platform. It is easy to use, and inexperienced investors will likely find this one of the least intimidating of the major investment platforms on the market today.
However, that simplicity does not belie hidden depths. There’s simply an upper limit to the complexity that this system supports. Sophisticated traders will often be unable to find much of the technical data that they’re looking for, nor will they be able to create the kind of customization that investors typically rely on to see multiple points of data at once
This is a problem for such an expensive service. Users who pay for one of the pricier trading platforms on the market should expect detailed metrics such as in-depth volatility analysis, complex averages, Greeks and similar data. They should expect to be able to build more sophisticated trades such as covered calls or conditional positions, yet will find this system wanting.
On top of all of this, the WellsTrade interface simply feel underdesigned. Features that should take one click often take two, and information that you expect to find right away is generally another click or two away. This doesn’t make using WellsTrade hard per se. Rather it is just a little less convenient in a lot of ways. The experience of using WellsTrade is that things aren’t confusing, but they do frequently feel slightly harder than they need to be.
The Bottom Line
WellsTrade is not one of the better full-service platforms on the market. It is fairly expensive by industry standards while providing fewer options for research and data analysis than just about any mainstream competitor. Investors who already use Wells Fargo Bank may find some value in uniting their banking and investing into a single platform, and long-term investors who hold assets with very little trading activity may not find the platform’s limitations much of a barrier. However, sophisticated traders and active traders will quickly find this service frustrating, and anyone who’s not a Wells Fargo customer already can simply do better elsewhere.
Tips on Investing
Don’t settle for the first service that comes along. Whether you’re looking for a trading platform because a friend recommended it, or maybe you just saw an ad, this is a big decision. Make it with the right help. SmartAsset’s matching tool can help you find a financial advisor, in minutes, to guide you to the right investment platform, and then make a plan for how to use it well. If you’re ready, get started now.
If you’d like to take a broader look at all your options for online trading platforms, use a free brokerage comparison tool to find the best fit.
Photo credit: ©iStock.com/Xesai, ©iStock.com/MicroStockHub, ©iStock.com/Chaay_Tee