Finding the best online trading tools for your needs

— -- Q: How can an investor decide which online brokerage firm has the best trading and investing tools available?

A: Not long ago, investors would choose their brokerage based on which ones had the best coffee in the office or were offering the nicest toaster as a promotion.

But things have changed as more investors take control of their finances and look to conduct more business online. A brokerage firm's website, and other electronic tools, are a key way that these firms compete with each other for customers.

But you ask a valid question. Since most brokers make their trading tools and other parts of their websites available to customers only, how can you evaluate them before making a decision?

Luckily, there are a few steps investors can follow to narrow the field of potential brokers and settle on the ones that offer Web tools that are best for you. Here's what to do:

•Step 1: Check the reviews. A number of websites review the quality of online brokerages. Some of these reviews may be written by current customers who have access to the sites or by professional reviewers who are granted access. An excellent place to start is J.D. Power, which evaluated the self-directed firms, placing a heavy emphasis on customer satisfaction. J.D. Power examines all the major firms based on a number of criteria, including overall satisfaction, account offerings, information resources, account information, trading fees and interaction.

•Step 2: Consider the pricing. If a company's fees and commissions are not appropriate for you, you might rule out that brokerage right away. Take a look at the commission structure and interest rates for the products you're most likely to use. If you're going to run up huge bills trading, it's probably better to scratch that brokerage from your list. If a brokerage offers free commissions for investments you buy or sell frequently, you might be more willing to tolerate a website that might not be your favorite.

•Step 3: Read the company's pitch. Most of the major brokerage sites allow even non-customers to check out some areas of their sites. Fidelity, for instance, allows anyone to test the simple version of its stock-screening tool. Just looking around the site can give you a good idea of what tools are available. But most of the brokerages offer something similar, and some even let you create an access account for the brokerage without creating a brokerage account.

•Step 4: Kick the tires. Sometimes the best way to find out which brokerage's trading tools you like the best is to just try the site. It's easier to do this than ever. Most large online brokers are paying investors decent sums of money to move their portfolios to them. Yet others are paying to reimburse any switching costs. So, many investors can try different brokerages at no risk.

The online brokerage business is as competitive as it's ever been. It's a great time to be an individual investor as there are many great choices. It's true, though, that different brokerages address different investors' needs. And the brokers' different philosophies show up in the design of their websites. You'll want to take your time, and you'll find a brokerage that works for you.

Matt Krantz is a financial markets reporter at USA TODAY and author of Investing Online for Dummies and Fundamental Analysis for Dummies. He answers a different reader question every weekday in his Ask Matt column at To submit a question, e-mail Matt at Follow Matt on Twitter at: