My Favorite Online Brokers for High Income Parents

Sooner or later, if you follow the advice here, you’re bound to have some money to put away for investment purposes. Do it yourself investing isn’t for everyone, but I encourage you to learn as much as you can and get comfortable with handling the bulk of your investment portfolio. You can do very well with a simple three fund portfolio and there isn’t much more to it than making sure your asset percentages stay within the parameter you set up in your investment policy statement.

As I look back over my investing career I’ve had a lot of accounts with different online brokers. When I’ve reached new income and wealth levels, changed jobs and learned more about investment and personal finance, different brokers have presented different advantages. As a result, I’ve had personal experience with every one of the brokers on this list.

So let’s say you’re a brand new biological sciences Ph.D. and now make a good salary. At the end of every month, there is some money left over. You’ve made your debt payments and put food on the table. Now, you’re looking for the best broker to help make low-cost investments and possibly set you up for your future account needs.

You might want to fund an IRA, Roth IRA, or 529 plan. You would also like to keep all your investments in one place, just for simplicity but aren’t opposed to mixing and matching to take advantage of the best deals.

What is the best online broker that can accommodate all the accounts you might need, has good investment options and doesn’t charge you an arm and a leg to accomplish this noble feat?

The truth is you would probably be better off mixing and matching online brokers depending on the type of account you want to fund. Your particular situation also matters, but let’s look at the advantages and disadvantages of the best online brokers for high income parents.



The categories that I am evaluating are:

  1. Access to quality investments for low or no commissions
  2. Access to accounts a parent may need (IRA, Roth IRA, 529, Custodial IRA, HSA, solo 401K)
  3. Easy Interface
  4. Customer support
  5. Any additional perks


Merrill Edge

Merrill Edge may be the best deal for those of us out there have over $100,000 in assets. With that much spread throughout your Merrill Edge (or Bank of America) accounts, you get 100 free equity and ETF trades a month. This includes all the Vanguard, Fidelity and Schwab low expense ETFs. After that commissions are $6.95 per transaction. I don’t see a situation where I would need more than five trades a month, let alone 100, but it’s nice to know it’s there if I needed.

The have all of the accounts listed above. Participants have access to the NextGen portfolios through the 529 accounts. These are primarily made up of either Blackrock or i-Share portfolios with expense ratios of 0.18-0.58%

I’ve had my Merrill Edge account for the last couple years and everything has been very easy to use. You can look at individual tax lots, select dividend reinvesting and make trades will ease from either desktop or mobile applications.

Customer support has never been an issue. Someone has returned my email within 24 hours anytime I’ve contacted them. I also got a bonus of $600 during my transfer to the account. I’ve heard rumors that you could get as high at $1000 depending on the amount, so it behooves you to call and see what they can do for you before funding an account with six figures or more.


When it comes to perks, this is where Merrill Edge and Bank of America blow the doors off of any other broker if you have enough money invested with them. Okay, maybe blow the doors off is a little strong but when you have over $100K invested, you qualify for Preferred Honors. With this classification you get 100 free trades for equity and ETFs a month, unlimited ATM transactions at any ATM nationwide, most banking fees waved, some fairly meaningless bumps in money market rates, and a reduction in some loan interest rates.

The best perk is a 75% increase in credit card rewards. That means with the travel rewards card it increases from 1.5% to 2.625% rebate and for the cash rewards, it is 5.25% back on gas and 3.5% back on groceries. Just those two cards could save you a lot of money on common expenses.



Vanguard was the original leader when it came to excellent low-cost investment options. They’re still one of the top options when it comes to low expense ratio mutual funds and ETFs. One drawback is that to get the preferred expense ratios in their admiral class mutual fund you need a minimum of $10,000 invested with them in each fund. You’ll need $30,000 to invest in a classic three fund portfolio but they do have target date funds that could get you where you want to go for less. It will take you a couple of years of investing in an IRA before you can convert to the lower expense ratio admiral share, so you’ll have slightly higher expenses for that first year.

You can buy Vanguard ETFs commission free with a brokerage account. That is another alternative for lower account values.

You’ll need $30,000 to invest in a classic three fund portfolio but they do have target date funds that could get you where you want to go for less. It will take you a couple of years of investing in an IRA before you can convert to the lower expense ratio admiral share, so you’ll have slightly higher expenses for that first year when starting.

Vanguard offers pretty much every type of account that you could need. If you don’t get a tax break by investing in your home state 529 plan, the Vanguard Nevada sponsored plan is an excellent option. They have various portfolios with expense ratios as low as 0.17% They also have minor (or custodial) IRA’s. It will take at least $1000 to invest in the vanguard Star Funds for the minor IRA though.

The online interface has been easy to use and when calling customer service for specific questions, they have always been very responsive.


Aside from the perk of lower expense ratios once you reach $10,000 in an Admiral individual investment, Vanguard has the Flagship Services that kick in once you have $1 million invested with them. This includes access to dedicated Flagship representatives, certified financial planners and select mutual fund access that is only open to Flagship members. Once you reach $5 million you qualify for Flagship select which is another cut above with more services available.


TD Ameritrade

With TD Ameritrade, there is ample access to low-cost investments through Vanguard and i-Share ETFs. Several of them are included in their 100+ commission fee ETFs. Don’t forget to sign up for access to this program though. If you don’t sign up, they will charge you for the transaction. It’s a checkbox on the website interface. If you mess up once (like I did) they were kind enough to refund the commission once. Just to be 100% transparent, I do have an affiliate link with TD Ameritrade so if you sign up through my link (the green advertisement), I’ll get a commission, but I would recommend them in certain situations even if I didn’t have that relationship. 

They also have access to Vanguard mutual funds but a $49.99 commission applies when buying outside their no transaction fee mutual fund list. It is cheaper to stick with the ETF’s if you can. 
My Favorite Online Brokers for High Income Parents

If you are inclined to invest in options, they have a robust options platform through their Think or Swim platform.

They have all the accounts you could want including 529 plans but at an elevated expense ratio (usually around 0.5-0.7%). They use the Nebraska plan, so it would be better to just go through the state if you want to use Nebraska’s plan.

The website is easy to use. I have called a few times for questions and the first line of representatives mainly uses the website and scripts to answer questions. If you need further information, the representative will transfer you over to the specific department to address your concern and the people there have always given me the answers I needed.


The main perk I could find with TD Ameritrade is called Apex. It consists of access to investment ideas, high-level research, and access to client services. To qualify, you either need to trade five times a month or maintain an account over $100,000. For the most part, someone that invests comparable to me these things are useless.



Fidelity offers 90 commission free ETF’s. You could build a very low cost three fund portfolio just from their list. They also offer the usual other trading instruments such as options and futures.

The Fidelity 529 plans are associated with four different states, New Hampshire, Arizona, Massachusetts, and Delaware. They give you access to Fidelity Index funds with expense ratios as low as 0.11%. Fidelity is also one of the two brokers I could find that allows you roll over an IRA to a solo 401k. You can check out why this is helpful here.

Just like the others, the website interface is great. My wife had an account with Fidelity and I’ve called their customer service a few times to ask about different account options. They have always been able to answer my questions with promptness and courtesy.

Once your account grows to over $250,000, you’re eligible for Fidelity Premium Services. This gives you access to other wealth management tools. The pamphlet is pretty nonspecific. My cynical side thinks this is just an opportunity for Fidelity to sell a wealthy investor some products they probably don’t need, but I’ve never talked to those advisors so I can’t comment on the specifics. They may be fine but I would use caution and do your research before implementing any ideas or strategies they give you.


Over $1 million dollars qualifies you for Fidelity Private Client status. This gives you access to a financial consultant that will help you build, manage and preserve your wealth and manage your portfolio.


Charles Schwab

Charles Schwab has been on a mission to compete with Vanguard as the low-cost index fund leader. They seem to want to capture a large part of this market share. These ETFs are part of the Schwab One Source program. The most attractive expense ratios are in the Schwab ETF family themselves. They are the best combination for low and high account values to invest in low-cost index funds. They give investors access to over 200 commission free ETF’s.

My Favorite Online Brokers for High Income Parents

Again, Schwab gives investors access to all the typical accounts. They have a very attractive option for custodial IRA’s. The minimum to invest is $100 and the account has access to all the free ETF’s.

The Schwab 529 account is one of the less attractive options on the list. It is affiliated with the Kansas 529 plan. The expense ratios are on the higher side as you can see below.

My Favorite Online Brokers for High Income Parents

User interface and customer support have always been fine. They also have local offices in many cities so you can have a face to face meeting if you like that sort of thing.


As for large account perks, Schwab has the Schwab Private Client program. When an investor has $500,000 in assets, she is eligible for a team to create a custom tailored investment program that fits the clients wants and needs. This costs 0.9% on the equity side and 0.7% on the fixed-income side annually. This is on top of fund expenses, making this a very expensive option.

Schwab also has their own robo-advisor version called Schwab Intelligent portfolios. These are fee free but you have to have a cash portion with this program creating some cash drag. That is the main reason I choose not to use this program.


E*Trade boasts over 100 commission free ETFs available to their investors. The fund families consist of names like Global X, Oppenheimer, and Wisdom Tree. Upon closer examination though, you’ll see that most of the expense ratios are in the 0.2-0.5% range. That makes these 7-20 times more expensive than their Schwab and Vanguard counterparts.

Thankfully E*Trade does make over 4400 no transaction fee mutual funds available. Several of the Vanguard options fit this category. Mutual fund investing would be your best bet if you decide to use E*Trade for your broker, but there is a $19.99 commission with Vanguard fund purchases.

E*Trade is the other company that allows direct IRA to solo 401k rollovers. This is the whole reason I even have an account there. E*Trade doesn’t offer a 529 plan so you would have to seek that someplace else.

When setting up my solo 401k with E*Trade, the website was very easy to use. The representative was very prompt in returning my emails with questions. There really hasn’t been a company yet that has performed significantly better than the others and E*Trade is on par.


As far as perks, E*Trade is tailored more to traders and when a client has more that $250,000 he has access to E*Trade Pro. It is a customizable platform to enhance your trading experience. For my purposes, it doesn’t offer much value since I’m not a trader.


Who should you use?

So now that we have examined these brokers, who should we use?

This is going to be specific to your situation but mixing and matching these brokers could be required to get the best deal.

I strongly recommend at least getting to the preferred honors category with Merrill Edge because of the credit card perks but beyond that, you could probably do very well with any of the other brokers.

For my specific situation, I think $100K with Merrill Edge and the rest in Vanguard would accomplish everything I need.

Of course, my 401k with Schwab can’t be moved unless I leave my job but that is fine for now. They are another excellent option.


If you have any other questions please let me know. Have you found any other brokers that have better options for investments than these? How were they better and what was your situation?



Tom is a doctor, husband and father of five with a passion for parenting and finance. When he isn't skateboarding, riding BMX, or jumping on the trampoline with his kids, he is reading and writing about personal finance. He helps high income parents educate and mentor their kids to become financially, emotionally, and intellectually self sufficient.

4 Responses to “My Favorite Online Brokers for High Income Parents

  • I am a Fidelity guy. In addition to the advantages you mentioned, they have physical branches which can be helpful if you need to talk to someone in-person.

    • I’ve never ventured into a branch but thanks for pointing that out. Good to know.

      Tom @ HIP

  • It seems like Merrill Edge has some fantastic perks that I wasn’t aware of. I definitely need to check them out as I may be leaving some money on the table with my credit cards. Thanks for sharing!!!

    • It’s definitely worth checking out if you have the funds to place in a Merrill Edge account. You can do it through the BOA side too but it’s not worth it due to the cash drag required.

      Tom @ HIP

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