Axos Self-Directed Trading review 2024
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Axos Self-Directed Trading: Best for
- Mutual fund investors
- Customer support
- Existing Axos Bank customers
Axos Self-Directed Trading is a solid option for investors just looking for the basics or current Axos banking clients looking for a capable broker. You’ll get no-commission stock and ETF trading as well as more than 10,000 no-transaction-fee mutual funds, which is comparable to industry leaders. Customer support is solid, with phone and chat options alongside email support. Unfortunately, the account fees are among the highest in the industry, including an annual IRA fee, which most brokers have eliminated. Options traders face high commissions, which start at $1 per contract. Its premium Axos Elite offering ($10 per month) offers discounted options commissions and lower margin rates, but you can likely do better at other brokers for no additional cost.
If you’re looking for a more comprehensive brokerage offering, you should consider Interactive Brokers or Charles Schwab. You’ll get access to more tradable securities as well as a greater number of account types such as custodial accounts and retirement accounts for the self-employed.
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Axos Self-Directed Trading: In the details
Pros: Where Axos Self-Directed Trading stands out
No-transaction fee mutual funds
Axos has eliminated commissions on mutual fund trades, down from its previous level of $9.95 per trade. You’ll be able to choose from more than 10,000 different funds, making Axos an ideal place for mutual fund investors.
Commissions on mutual fund transactions are one of the few areas where brokers still charge commissions, though many have started to eliminate these as well. Other brokers including E-Trade, Firstrade and Ally Invest have also moved to commission-free mutual fund trading.
Stock and ETF commissions
Axos clients will be able to trade stocks and ETFs commission-free, though commission-free stock trading is limited to stocks that trade on U.S. exchanges. This feature has become the standard in the brokerage industry, but it’s still nice to see it offered here. Axos launched its self-directed trading business in 2021, and commission-free stock and ETF trading is essential if it hopes to attract new clients.
For decades, commissions on trades ate into investors’ returns and made frequent trading quite costly. But commission-free trading has made these costs a thing of the past, though investors would be wise to think about the tax impact of frequent buying and selling.
Axos Elite
Axos Elite is the broker’s premium membership program that you can choose to sign up for when you open an account. The program costs $10 per month and comes with a handful of features and cost savings.
If you do upgrade to Axos Elite, you’ll receive premium TipRanks research and extended hours trading, as well as discounts on options trading and margin rates. Options commissions drop from the usual $1 per contract to $0.80 per contract. Margin trading is only available to Axos Elite customers, so if that’s something you’re interested in, you’ll need to buy the subscription. You’ll also get real-time market data and be able to trade in extended hours.
Axos Elite improves slightly on the basic offering, but you can find many of these so-called premium features at leading brokers for no additional cost. For example, in the case of option commissions, your standard cost at most brokers would already be cheaper than even the discounted price at Axos. So if you want access to margin trading or plan to trade options frequently, Axos probably isn’t the best broker for you.
Customer service
Axos offers clients plenty of ways to get questions answered whether it’s through email, chat or the phone, which is available Monday through Friday from 11am-9pm ET. This level of customer support isn’t always available in an increasingly digital-first world, so it’s nice to see Axos offer help to customers who may have questions.
Cons: Where Axos Self-Directed Trading could improve
Account fees
Axos charges several account fees, many of which aren’t common among leading brokers and others are on the high side of the typical range. Here are some of the key fees to be aware of:
- Transfer-out fee: $100
- Retirement account transfer fee: $80
- Retirement account termination fee: $60
- Retirement account annual custodial fee: $60
If you’re looking to avoid these kinds of fees, Fidelity Investments offers these key services without an extra charge. And few brokers charge custodial and account fees these days.
Options commissions
Options traders aren’t likely to find what they’re looking for at Axos, with commissions coming in above the standard rate of $0.65 per contract. Traders will pay $1 per contract at Axos, or $0.80 per contract if they’re part of the Axos Elite program, which costs an additional $10 per month.
Some of the best brokers for options trading offer commission-free option trades, and many offer better rates than Axos. If you’re an active options trader, you might consider Firstrade or Interactive Brokers, both of which offer better prices and more tools and features that traders will appreciate.
Securities available
Axos offers trading in stocks, ETFs, options and mutual funds, which should satisfy the needs of most investors. But those looking for more exotic choices, such as futures, foreign exchange or cryptocurrencies, will have to look elsewhere.
Account types
You’ll be able to open an individual or joint brokerage account as well as a traditional or Roth IRA. These account types tend to cover what most investors are looking for, but the lack of more specialized accounts is a negative for Axos.
The leading brokers in the industry offer a variety of different accounts that you won’t find at Axos such as custodial accounts, education savings accounts and specialty retirement accounts such as the SEP IRA or solo 401(k).
Research and education
Research and educational material available to Axos clients is fairly limited unless you’re willing to pay up for the Axos Elite subscription. Axos Elite members get access to TipRanks, an outside research platform that tracks analyst recommendations and offers other research tools. Other brokers offer access to independent investment research or their own in-house reports for no additional cost.
Boosting its educational content would also make Axos more appealing to new investors. The Axos blog has some articles that investors might find helpful and there are occasional webinars on timely issues, but they appear to happen infrequently.
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