Charles Schwab vs Webull: Managed or Self-Directed Investing?

Charles Schwab manages roughly $8 trillion in client assets and is adept at satisfying its clientele regularly. Webull customers still can’t buy futures, annuities, bonds, mutual funds, or over-the-counter stocks, among other investment options Schwab offers. Even though Schwab offers cryptocurrency futures, one area where Webull excels is in cryptocurrencies.

Webull is another commission-free online trading platform, and CEO Anthony Denier says they generate money by offering lending products like margin loans to users who want to borrow money to purchase additional stocks. Short sellers, who use borrowed shares to bet on the company’s decline, can get stock loans through Webull. Through its order-routing services, Webull also earns money. Webull stands out from its competitors since it offers solely self-directed accounts.

Charles Schwab Overview

Charles Schwab has been devoted to customer service since its inception in 1973. Charles Schwab has a history of serving its clients with award-winning service and expertise during good and bad economic times.

Since its foundation in 1973, Charles Schwab has made its clients’ success its top concern. Charles Schwab and other industry giants have this distinct advantage over younger and less established competitors like Webull.

Schwab and others like it have been around for quite some time, and as a result, they have gained the confidence of many customers.

The size and prominence of Schwab, and other large companies, make it harder for them to respond rapidly to shifts in the market. In contrast to users of numerous investment applications, Schwab customers should not expect frequent upgrades or improvements to the platform. That’s why it’s not going to be as polished as Webull.

Webull Overview

Webull is an online trading platform that promises to combine top-tier investment research, trading tools, and data in one convenient location. 

Webull is a new online broker founded in 2017 and wholly owned by Chinese investors with headquarters in New York and recently expanded operations in Hong Kong and Singapore. Webull’s primary demographic comprises young adults, making them the perfect fit for the company’s mobile-first debut in May 2018. Webull is setting up shop to accommodate newer and more active traders and anybody interested in a platform with no account minimums, commission-free trading of stocks/ETFs/their options, and several cryptocurrencies.

If you’re a frequent trader, you’ll love the Webull app. On the other hand, the platform will serve the demands of many long-term investors. Webull has a reputation for being easy to use and intuitive for newcomers. The platform’s research and data goals are not compromised by its user-friendliness. Webull’s trading platform includes all the market data that most traders need. This program is surprisingly simple to use, considering its many features. Webull’s user interface may be easier to navigate for younger investors than Charles Schwab’s.

Charles Schwab vs. Webull Service & Feature Comparison

Costs

One of Webull’s best features is perhaps its zero-commission stock and ETF trading. Although this is not unusual these days due to the widespread adoption of commission-free trading, it is nevertheless desirable. After signing up, you’ll have access to Nasdaq Level 2 quotations and trading for three months at no cost.

However, Webull surpassed the competition by providing free options trading in early 2020. There is no initial investment or contract charge. Among the leading players, that’s as good as it gets.

Charles Schwab charges $4.95 for commission on standard stock trades, whereas Webull charges nothing. Options trade at Charles Schwab incur a $4.95 + $0.65 per contract. Schwab doesn’t charge fees to buy stocks, options, or exchange-traded funds. In December 2021, however, Schwab changed its price for over-the-counter trades from $0 charges to $6.95.

Over 4,200 commission-free mutual funds are available via Schwab. Thanks to its in-house array of index funds and ETFs, Schwab currently has some of the most competitive fee ratios in the industry. Approximately 0.50% of the funds available on Schwab’s platform have cost ratios of 0.50% or less.

Account Types

Joint accounts, custodial accounts, and accounts for the self-employed (such as a SEP IRA or solo 401(k)) are not offered by Webull, unlike at many other brokers (k). Both businesses provide IRAs for their employees. Schwab offers several varieties of Individual Retirement Accounts (IRAs), such as custodial and inherited options.

The amount of account options is one of the most visible differences between Webull and the other broker. First, suppose you want to register a joint brokerage account with someone like your spouse. In that case, you’ll have to search elsewhere because Webull only provides individual brokerage accounts. Only standard and Roth IRAs are supported by Webull. Custodial, 529, or trust accounts, among others, are unavailable. Moreover, it lacks a cash management account, which is common among its competitors.

Education and Research

Webull’s primary user base consists of young, inexperienced investors. Hence the platform’s lack of instructional resources is a significant shortcoming. Though it’s convenient to be able to trade options with only a few clicks for no cost, inexperienced traders should be wary. Let’s pretend Webull is actively seeking more funding. Then it is their responsibility to supply them with information that will aid them in understanding the often-complex financial world. Schwab and other significant brokers provide far greater client education resources.

When compared to Schwab, Webull’s free basic research is lacking. This is to be expected, considering the app’s low price, but it shouldn’t make you feel cheated out of the broker’s services.

Range of Investments

Mutual funds, exchange-traded funds (ETFs), index funds, bonds, options, and futures are just a few of the various products that may be traded with Charles Schwab. However, unlike other competing brokers, it does not provide access to foreign exchange markets.

Using Schwab Stock Slices, investors may acquire a portion of a stock share without paying the total price. If a share of stock costs $100, and you invest only $10 in it, you will own ten percent of that share. Investors can purchase as few as one $5 slice or as many as ten slices at once.

Only equities from firms included in the S&P 500 index can access this feature. Fidelity and Interactive Brokers, two competing brokerages, both provide trading in fractional shares without such limitations.

Cryptocurrency trading is one area where Webull stands apart from other brokers. Unlike some of the best brokers, Webull lets you trade cryptocurrencies straight up without going through futures first. You may trade Bitcoin, Ethereum, Cardano, and Solana for as little as $1.

Managed Accounts 

Both self-directed and managed accounts are available via Schwab. The broker-dealer provides both automated and human-assisted services for the latter choice. The automated system provides only exchange-traded funds but has the lowest fees at zero percent.

Trading Technology

Schwab provides its trading services customers with access to various advanced trading platforms, all of which are provided at no cost.

StreetSmart Edge is the company’s flagship product; it’s an adaptable platform with downloadable software available online via cloud computing. In addition, it comes with a set of tools called StreetSmart Central, which may be used for trading options. Trading may also be done on the go using the broker’s mobile applications, Schwab and StreetSmart Mobile.

Traders of all kinds may use the extensive resources and information both StreetSmart and Schwab.com provide. Schwab’s website allows traders to make simple purchases, while the other platforms provide access to more advanced options.

The intuitive interface of StreetSmart Edge makes it easy to adapt to your individual trading preferences. Powerful charting capabilities, the ability to trade several securities in a single order window with support for different order types, and market exposure monitoring are just a few of the many sophisticated features available. The flexibility to customize many trade layouts and the Balance Bar, which gives you a rapid overview of your account and purchasing power, are two of the most notable aspects of this platform.

Now it’s easier than ever to look for symbol information, monitor real-time market data, and place an order.

Traders may check in on their portfolio and the markets, read up on the latest research and peruse the latest technical data all on Schwab.com. For stock, ETF, and options orders, it provides a user-friendly trade ticket that automatically updates with market data.

Mobile Apps

Webull has an excellent mobile app that outdoes the offerings of its main competitors in terms of functionality. The app includes a clean interface and helpful graphing tools for analyzing market information. A wealth of information, including links to external news sources and the company’s press releases, is provided for each stock on its dedicated page. By contrast, Webull members’ opinions on the stock are shown on a comments page, where you may get a sense of the general public’s reaction to the stock.

High-level financials are available, and so is a breakdown of the app’s order book and how its orders are distributed. At the screen’s bottom is a buy/sell button; clicking it brings up a trading window where you can quickly enter your trade’s information and proceed. Following the link at the page’s footer will bring up many options for traders. To begin trading, simply select the desired options strategy and configuration.

When the speech function is AI-enabled, traders can use their voices to initiate deals. It’s all quite futuristic in feel, even though you might need to verify your work to ensure you’re following the proper sequence.

Schwab has two different mobile applications you may download: Schwab Mobile and StreetSmart Mobile. It’s worth noting that although the Schwab mobile app has primarily positive user evaluations, the StreetSmart Mobile app consistently receives worse ratings.

Other Features

Paper trading

Webull provides a virtual paper trading account you may enroll in quickly and easily. It’s a fun addition that works just like the real account, and it gives you a virtual million dollars to play with from the outset.

Instant funding

Deposits up to $1,000 are instantly funded at Webull. Although the money might not appear until four or five days later, this is an excellent element that immediately pulls you into the game. While investors with a longer time horizon don’t care about financing speeds, traders who need access to their money quickly consider it a “good to have.”

Fractional shares

In July of 2021, Webull became another broker that provides fractional shares. It was a strange and noticeable omission from the tech-focused broker, so its inclusion is welcome. Investors may buy fractional shares of stocks and ETFs for as little as $5 each. However, before making any purchases, they should double-check that the firms they’re interested in are still on Webull’s list of accessible investments. One element still missing from the offering is the ability to buy shares in fractions for reinvested dividends.

The equities in the S&P 500 can be purchased in fractional shares through Schwab. While these equities may interest many traders, other brokers specializing in fractional share trading provide a wider variety of stocks to choose from.

Customer Support

Many people choose Schwab because of the excellence of its customer service. Schwab demonstrates its “customer first” approach by making assistance available via online chat, phone, and email around the clock. This includes having people available to answer any inquiries or address any concerns you may have when using Schwab.

Charles Schwab also employs a large number of financial counselors. Webull does not provide this significant advantage. Let’s say you think your issue is more complex and would benefit from a face-to-face meeting. If that’s the case, Schwab has more than 300 brick-and-mortar locations where you may talk to a financial advisor in person.

Another benefit of Schwab versus Webull is the availability of in-person meetings with financial advisors. Many of Charles Schwab’s clientele are elderly individuals who didn’t grow up with a “do-it-yourself” investment philosophy, which is likely why they choose to work with the firm.

My Preference: Charles Schwab Wins Over Webull

Those looking to save for retirement should use Charles Schwab since it provides a superior platform overall. We believe that Webull’s excellent PC trading station, mobile app, and zero-commission options trades make it the best choice for active traders.

Schwab is a one-stop shop for investing, with a wide range of assets available (including futures, mutual funds, and more). Schwab Intelligent Portfolio is a free automated investment adviser provided by Schwab. The catch is that you’ll need to put down at least $5,000 to get started.

Webull is deficient since it does not have dividend reinvestment or rebalancing features. Schwab offers all of these options and more. However, this is to be anticipated, as Webull caters to the more serious investor. Schwab, on the other hand, focuses more on the long-term investor.

Last but not least, Webull has an advantage over its competitors due to the value of the registration bonus it offers. You may obtain two free stocks when you create a brokerage account with them and deposit any amount. Schwab does not provide a referral program at this time.

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