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Insider’s rating methodology for investment platforms

Insider’s rating methodology for investment platforms

Our experts answer readers' investing questions and write unbiased product reviews (here's how we assess investing products). Paid non-client promotion: In some cases, we receive a commission from our partners. Our opinions are always our own.

See how we rate investment platforms.

Personal Finance Insider reviews several types of investment platforms (as well as other product types), including online brokerages, stock trading apps, robo-advisors (automated investing accounts), cryptocurrency exchanges, NFT marketplaces, real estate investment platforms, and more.

To make sure we fairly assess companies that fall under each category, we've created a ratings methodology that considers factors like fees, investment selection, customer support, and ethics. 

Weighted ratings

Our ratings for each category range from 1-5. Each final rating doesn't represent the overall average of the numeral values assigned to each category. We've created a weighted average to determine a platform's final score; therefore, all categories (e.g., investment selection and access) won't be weighted equally.

For instance, with online brokerages, a platform will receive higher weightings in the fees category. We find that certain categories, such as fees and investment selection, are more important to users.

Keep reading for more information on our ratings approach.

Brokerages

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Brokerages are online investment platforms that allow retail traders and investors exposure to a range of investment and account types. Here are the factors we look at to arrive at our editor's ratings for brokerages:

Fees (weighted 25%)

Platforms with the highest ratings (4-5) here typically offer a $0 minimum requirement for self-directed accounts, with commission-free trading for stocks, ETFs, and options. They'll also typically offer no-transaction-fee (NTF) mutual funds and other fee-free fund options.

We'll assign the lowest scores (1-3) to platforms with a minimum requirement of $500 or more. Brokerages with limited commission-free trading options and no fee-free funds will also fall within this range.

Investment selection (weighted 20%)

Ratings for a broker's investment selection are the highest when the platform offers the assets provided by the top brokers in the industry: stocks, ETFs, options, mutual funds, annuities, bonds, and more.

Brokerages with stocks, ETFs, options, and one or two other asset types will receive lower ratings, and platforms with investment selections that only contain one or two investment types earn the lowest ratings. 

Robo-advisors

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This section includes the factors we use to assign ratings to automated investing accounts (robo-advisors). Robo-advisors are — as the name suggests — solely automated. They're great for investors who want to sit back and leave the trading decisions to a professional algorithm and/or team of experts.

Popular platforms include Betterment Investing, Wealthfront Investing, Ellevest, and more.

Fees (weighted 25%)

Automated investing accounts with no advisory fees, fees of 0.25% or lower, or monthly fees of $3 or less will receive the highest rating (e.g., 4-5) in this category. We will assign a lower rating if the robo-advisor either has fees between 0.25% and 0.50% per year, or charges between $3 and $9 per month.

The lowest ratings are for platforms charging more than 0.50% per year or $9 per month. However, if a platform has high fees but offers a minimum-free option, we'll add points to its final score. We'll deduct 2,500 basis points (or 0.25) if the robo-advisor's account minimum exceeds $1,000.

Investment selection (weighted 20%)

Platforms will land the highest rating (4-5) if they have a standard ETF offering and also offer index funds or additional investment types like crypto trusts. Platforms with expense ratio-free funds will also land in this category, even if they only offer one investment type.

Robo-advisors with the highest ratings also give investors a wide range of account types and portfolio options (e.g., socially responsible portfolios, tax loss harvesting, and smart beta strategies).

Platforms with lower ratings will be those that have the basic ETF offering. In addition, they'll typically offer a smaller selection of portfolios and account types, though features like tax-loss harvesting can still land a platform here. The ratings here range from 3-4. 

Those with the lowest ratings will provide the basic ETF offering, with a limited selection of portfolios and account types. Robo-advisors who fall into this category will receive a rating of 1-3 here.

Real estate platforms

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We also review real estate crowdfunding platforms (e.g., Fundrise and DiversyFund). Many let you invest in real estate investment trusts (REITs) and other real estate funds, although some — like Roofstock and Groundfloor — mainly only let you invest in individual properties or real estate debt investments. 

While we consider fees, investment selection, access, ethics, and customer support here, we also evaluate platforms based off another factor: liquidity (or how long your required to hold your investments).

Fees (weighted 20%)

Real estate apps with fees of 1% or lower (those with no fees receive the highest score in this range) earn the highest ratings, while platforms with fees between 1% and 3% earn lower ratings. 

Those with fees exceeding 3% earn the lowest ratings. In addition, we'll deduct a small amount for high minimums (or platforms with minimum requirements that exceed $500).

Investment selection (weighted 20%)

Platforms that offer at least three investment types will receive the highest rating. Platforms with two investment choices are next in line, and companies with only one investment type will receive the lowest rating. However, if a platform has one investment type but offers multiple property types or additional account types like self-directed IRAs, it'll receive additional points.

Liquidity (weighted 15%)

Platforms with term options of two years or lower will receive the highest ratings. Those with terms between two and five years are next in line. Real estate apps with terms between five and seven years will receive lower ratings, while those with holding periods of seven or more years will receive the lowest rating in this category.

Cryptocurrency exchanges

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Cryptocurrency exchanges offer 24/7 access to digital currencies like bitcoin, ethereum, dogecoin, and more. We assess the following factors when reviewing cryptocurrency exchanges:

Fees (weighted 20%)

The highest ratings are reserved for exchanges with a spread fee of 1% or lower or a taker fee of 0.1% or lower. Those with transaction fees that are lower than $2.99 will also make the cut. Plus, platforms with no crypto trading fees will earn the highest rating.

Lower ratings apply to platforms with spread fees that sit between 1% and 2%. A platform with spread fees between 0.1% and 0.3% will also receive a lower rating, as well as an exchange with a transaction fee that exceeds $2.99.

A crypto exchange will receive the lowest rating if its spread fee exceeds 2% or its taker fees exceeds 0.3%.

Investment selection (weighted 20%)

Exchanges with more crypto assets will receive ratings between 4-5. Platforms with more than 60 cryptocurrencies will earn the highest ratings, exchanges with between 30 to 60 cryptocurrencies are next in line, and platforms with 15 to 30 cryptocurrencies will receive lower ratings. Those with fewer than 15 cryptocurrencies will receive the lowest ratings. 

However, several factors can enhance the ratings of platforms with a more limited crypto selection:

  • It offers staking, has a wide range of order types, supports multiple wallets and crypto trading pairs, or it offers a crypto spending card with rewards available
  • It supports NFTs
  • Offers DeFi options, futures, margin trading, OTC trading, institutional trading, lending products (e.g.. crypto-backed loans), or payment services
  • Supports stock and/or ETF trading or other traditional asset types

Security (weighted 15%)

Exchanges that offer the following will receive the highest ratings: two-factor authentication, insurance for cash balances (typically FDIC insurance), KYC standards (identity verification), hot and cold storage options for customer assets, and additional layers of security.

Exchanges with lower ratings will only offer things like two-factor authentication, KYC standards, and hot or cold storage options for customer assets. Those with the lowest ratings usually only provide KYC standards and two-factor authentication or some form of security.

In addition, things like past security breaches will lower a platform's overall rating in this category.

NFT platforms

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We've reviewed multiple non-fungible token (NFT) platforms (e.g., Rarible NFT and OpenSea NFT). Below are the criteria we use to assign ratings:

Fees (weighted 20%)

We assign the highest ratings (these range from 4-5) to NFT platforms with transaction fees of 1% or lower. Those with transaction fees between 1% and 2.5% are next in line, and the lowest ratings apply to those with transaction fees that exceed 2.5%.

However, we'll add 2,500 basis points (or 0.25) to a platform's overall rating if:

  • It offers a gas-free minting option
  • It gives creators royalties up to 10%; platforms with royalty rates exceeding 10% will receive higher score additions

Investment selection (weighted 20%)

The highest ratings apply to platforms offering support for the basic NFT types: Art, music, sports, video games, collectibles, domain names, memes, and virtual worlds/items. Those that support multiple blockchains and wallets will also rank highest.

Platforms will receive slightly lower ratings if they only support the basic NFT types and offer access to one or two blockchains. Those with a limited selection of crypto wallets will also fall within this area.

We assign the lowest ratings to marketplaces that support the basic NFT types but only offer one blockchain and one or two wallets.

Security (weighted 15%)

NFT platforms will receive the highest security ratings if they: offer two-factor authentication, utilize KYC standards (identity verification), support multiple wallet options for customer assets, and provide additional layers of security.

Those next in line will also offer two-factor authentication, KYC standards, and multiple wallet options, but they won't give you access to additional layers of security. 

Platforms with the lowest ratings will only offer two-factor authentication (or some form of security) and KYC standards.

As with cryptocurrency exchanges, we'll make deductions of 5,000 to 10,000 basis points (or 0.50-1) from the final score for things like theft and past security breaches.

Portfolio insights and stock analysis apps

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Some investment platforms don't offer trading; instead, they provide portfolio insights on personal investment accounts you've linked, or they offer things like stock research reports or stock and ETF screeners. Popular insights and stock research platforms include Stock Rover and Front. 

See how we rate such apps below:

Fees (weighted 20%)

The highest ratings (e.g., these range from 4-5) apply to platforms that charge below 0.25%. We assign lower ratings to those that charge more than 0.25% or provide fees that exceed $7.99 to $39 per month.

Platforms with fees that exceed 1% or $90 to $340/year will receive the lowest rating.

Account features (weighted 25%)

Companies with the highest ratings will offer the following:

  • Research and analysis on specific investments
  • Community features and useful tools (e.g., ETF and stock screeners)
  • Personal investment account integration; support for traditional brokerage accounts and alternative accounts like crypto

We'll assign lower ratings to those that only offer research and analysis on specific investments and let you link your investment accounts to get better picture of portfolio.

The lowest ratings are for platforms that primarily offer research and analysis.

All-in-one financial apps

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We've also created a separate methodology for all-in-one financial/banking apps — such as Albert Investing or Oportun App – Product Name Only — that merge investing, saving, and spending under one roof. We assess the following factors to determine our ratings:

Fees (weighted 20%)

Apps with the highest ratings (4-5) have $0 minimum requirements and offer fees of $6 or lower. However, we'll assign a lower rating to a financial app if its minimum requirement exceeds $0, and it charges between $6 to $9 per month.

The lowest ratings apply to apps with higher minimum requirements and monthly fees that exceed $9 per month.

Account features (weighted 25%)

Companies will earn the highest ratings (4-5) if they offer multiple investment choices (typically stocks and ETFs) and account types, offer banking products with competitive rates, and give investors the option to trade on their own or utilize auto-investing features.

Second in line are those with one or two investment choices available. The app will also likely support banking products here, but it will ultimately have a more limited selection of investment accounts.

Our lowest ratings (e.g., 1-3) apply to financial apps that only support one investment type and offer a limited selection of banking products (e.g., checking and savings accounts) and investment accounts.

Gold companies

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We review dozens of gold companies — such as Goldco – Product Name Only and iTrustCapital – Product Name Only — that offer multiple means of investing in gold. The most notable is gold IRAs, but this also includes physical gold bullion and gold trusts. Many gold companies also offer silver IRAs, as well as platinum and palladium assets. 

Fees (weighted 15%)

Fees and minimums for gold companies tend to be on the higher side compared to other investable assets. To receive the highest fee rating (4 to 5) companies must have transparent fee structures, a low gold bar spread, annual management fees of $100 or less, and a $0 initial purchase requirement. 

Liquidity (weighted 10%)

Tangible commodities like gold bullion and gold coins are generally fairly liquid as they can easily be converted to cash. Unlike assets like real estate (which are illiquid) gold and precious metals can more easily be bought and sold for cash.

Companies with the highest liquidity rating offer various physical gold assets and gold-linked assets like futures, ETFs, stocks, and more. These companies should also perform quick trades and conversions. 

Investment selection (weighted 20%)

The best gold companies trade both physical and non-physical precious metal assets. This includes gold bullion, multiple types of gold coins and bars, as well as gold futures and trusts. Some of the most popular gold coins are Gold American Eagle, Gold Phoenix, Gold American Eagle Proof, and Gold Liberty.

Companies with the highest investing selection rating also offer multiple precious metals like silver, platinum, and pallidum. 

Security (weighted 15%)

To receive the best security rating (4 to 5) gold companies must have a transparent and strong privacy policy that protects any individual's personal information that may be collected through the website, email, phone calls, and more. 

Moreover, these companies should be equipped with proper security screeners and security doors to ensure that investors' assets are safe while investing in gold IRAs. Top-notch security measures prevent fraudulent activity, scams, and the stealing or misuse of customer information.

Of course, investing in physical gold bullion and coins adds an extra level of protection as tangible commodities can't be hacked or accessed digitally. 

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