Zecco Review - Zero-Cost No More But Still One Of the Best

Zecco was the brainchild of options trader Dino Van Es and former Merrill Lynch vice-president, Jeroen Veth. It began small as an online financial community and began operations October 9, 2006 amid a flurry of media offering “free lunches” on Wall Street. The name Zecco came from combining the words zero commission cost, using the ze from zero, c from both commission and cost and the o from cost. That was the original philosophy, a no cost brokerage service. However, by early 2011, the company changed the policy to a $4.99 per trade cost. This brought a rash of remarks in the community forum area from those who accused Zecco to stealing their funds to those who simply didn’t want to pay the cost. Most of the community members noted they received emails and/or phone calls.

Despite many of the user’s displeasure with the change, Zecco is still one of the more inexpensive places to trade and still offers occasional specials with lower costs or free trading. What started as a stock trading site, eventually blossomed offering bonds, Forex trading and many other types of financial transactions.

Zecco is truly a financial community. It has forums, blogs and even the ability to conduct live chat. There are ample educational opportunities for those that are novices and plenty of additional information for the seasoned investor.

Cost of Services

Despite the increase from free trades for those with $25,000 or more, to a cost of $4.99 per trade, the site still offers the user a bargain with very few fees. Stocks under $1 cost $6.95 and there’s an addition $0.005 cost per share for after hours trading. Options trade at $4.99 per trade and $0.65 per contract. The cost of trading Forex currency can be as low as 1 or 2 pips. This Zecco review would be remiss not to mention that while they advertise no commission trading, it’s a bit misleading since the dealer spread, pips, is the commission.

There are no fees to open an account on Zecco and no annual maintenance fee. However, if you have an IRA, there are fees associated with that account. There’s a $30 annual fee in addition to a $30 closure fee. For those with smaller IRAs, it can change a profitable account to a loser and is particularly devastating in a bad market. While the fee isn’t excessive, it’s definitely not as good as an IRA with no annual fee, which you can find elsewhere.

You can also transfer/ACAT funds into your Zecco account but there’s a fee if you transfer the funds to another brokerage. The fee is $50 and in line with most full service brokerage houses. However, there are no fees for online money transfers either way. The rest of the fees are similar to any other business, such as returned check fees, etc. No load mutual fund trades cost $10 unless they’re broker assisted, which doubles the price. Bond transactions are quite reasonable at $4.50 per bond with a minimum of $22.50 per transaction. Treasuries run $24.50 per transaction.

Products and Services

Zecco offers more products than many online discount brokerage services with the inclusion of Forex trades. The biggest benefit is the community atmosphere at Zecco and the ability to exchange ideas. It makes trading a social activity and educational process at the same time.

In addition to the community voice, there are many trading tools available free or at a low cost when you have an account at Zecco. They offer stock screeners, ETF screeners and mutual fund screeners. In addition, there are tools to analyze stocks, research tools and a strategy builder for options. However, not all these services are free. The site is slightly above the middle of the pack in the free analytical software and features offered.

Platform

Like most of the updated stock trading sites, Zecco is user friendly when it comes to the trading platform. If your trade doesn’t go through, there are messages to let you know why it doesn’t. It’s easy to understand and use.

Positives:

• The strong community interaction is a huge positive for Zecco.
• The trading costs are good and still lower than most sites.
• Zecco offers several products not available at many Internet brokerages, such as Forex products.
• There are no annual fees or minimums at Zecco for regular accounts.

Negatives:

• The IRA fees are quite expensive.
• Some of the most valuable services, such as tax planning and reporting services, aren’t free.
• At this time, Zecco doesn’t offer the option for mobile trading.
• You cannot have all financial products, such as annuities, in your Zecco account if you want to have all your funds under one roof.

Conclusion

Even though the move to charging a $4.99 cost per trade may have in had a mini revolt when the site instilled the cost, it still isn’t a bad price to pay. Unlike other sites that require you to go to an outside source for financial forums, Zecco makes it available right at their site, making this both a social site and brokerage house, something quite unique in the world of online brokerage firms.