WellsTrade Review 2024

Our Take

WellsTrade is designed for infrequent, buy-and-hold investors who are focused on equities. WellsTrade customers can trade stocks, exchange-traded funds (ETFs), mutual funds, fixed income, and options. It might be a good fit if you're a U.S. resident who already does business with Wells Fargo, whether that's through a bank account or mortgage. One advantage to having an investing account if you already have accounts with Wells Fargo is that it's simple to move money from one account to another.

Introduction

Wells Fargo was founded in 1852—amidst the California Gold Rush—and has since grown to become the nation's third-largest bank, behind only JPMorgan Chase & Co and Bank of America. During the late 2010s, the company was mired in a long list of costly scandals, including those involving fake customer accounts, discriminatory lending practices, securities fraud, and issues with auto loans and mortgages. As a result, the company paid billions in fines and restitution. 

Today, Wells Fargo is working to restore its image and regain trust by focusing on technology improvements and customer service. The company offers various financial products, including banking, credit cards, insurance, mortgage loans, wealth management, and brokerage services. Its brokerage division, WellsTrade, is intended to serve Wells Fargo Bank customers who want the convenience of managing their investments at the same institution where they have checking accounts and mortgages.

WellsTrade was late to the zero-commission game but finally joined the pack in December 2019, dropping commissions for listed stocks and ETFs to $0. Investors who prioritize analyst research and sell-side recommendations may also find what they are looking for at WellsTrade. However, in both cases, active investors looking for low costs and high-quality tools will be disappointed by what WellsTrade has to offer.

Pros & Cons

Pros Explained

• No commissions for stock and ETF trades: Like most brokers today, WellsTrade offers $0 online stock and ETF trades (excluding penny stocks). Keep in mind that if you place a stock or ETF trade over the phone, a $25 agent-assisted trading fee will apply.
• Easy-to-use website and mobile app: The website and mobile apps are simple to navigate and appear very similar, so switching between the two platforms is easy.
• A single app gives you access to all Wells Fargo accounts: You can manage all your Wells Fargo accounts from a single website or app. This "one app to rule them all" can be a handy way to keep track of your finances.

Cons Explained

• Limited research offerings outside of proprietary Wells Fargo analysis: Though the Wells Fargo proprietary research offerings are worth considering, there is very little else available. Screeners are limited, and there is no options analysis at all.
• Quotes do not stream: Streaming real-time quotes are not available. When you first bring up a quote, it displays in real-time, but you have to refresh the page to update the price manually. This extra step can make it difficult to gauge market movements. 

How to Use WellsTrade

Getting started with a new account is relatively simple. You can sign up for a standard (brokerage), Traditional IRA, or Roth IRA account on the WellsTrade website or mobile app. Most applicants can provide their signatures electronically; however, you may have to print out some forms and mail them in, which will delay the opening of your account.

If you already have a relationship with Wells Fargo, your personal details automatically populate the application, which can be a time saver. There are a few extra hoops to jump through if you want to trade options or use margin. One upside to using a bank-based online broker is the ease of moving cash from one account to another, both on the browser and mobile app.

The web-based platform is easy enough to navigate, but it's very slow. Most account functions, research tools, and order entries appear under two-level menus. When you first log in, you will see an overview of your brokerage account with balances and a chart that shows your asset allocation. You can set up account groups and change out the data displayed on your portfolio listing, but that's about it for customization.

You have to make a few clicks or taps on the menus to open an order ticket. The mobile app is essentially the same experience as the web version, scaled to fit the device.

Trade Experience

You can enter orders for stocks, single-leg options, ETFs, and mutual funds very easily. WellsTrade does not offer conditional order types such as one-triggers-the-other, but you can use standard limit, market, and stop orders. The order entry process is simple, but it takes a while to navigate from one page to the next, which could become tedious (and impractical) for active investors. It's possible to start an order from watchlists or screener results, and you can make tax lot choices while entering orders.

Single-leg option orders can be entered online, but the maximum is two-leg positions. You'll have to make a separate transaction to create a covered call or protective put when opening a long stock position. If you're a regular spread trader, this is not the brokerage for you as you will have to call a broker to make those trades as a single order. In addition to the inconvenience, those calls can get pricey quickly. There is a $25 additional fee to place an order through a live broker.

Mobile Trade Experience

Placing a trade on a mobile device is very similar to the web order entry experience. To close a position and avoid making errors, it's a good idea (especially on mobile) to start from your “Positions'' page and then tap on the “Trade” link.

Range of Offerings

WellsTrade supports a limited range of asset classes. There's no access to fractional shares, futures, futures options, crypto, or forex trading. For passive investors, there is a wide selection of no-transaction-fee mutual funds and a decent mutual fund screening tool.

• Stocks long and short
• OTCBB (pink sheets)
• Mutual funds (more than 3,000 total, including more than 1,800 with no load and no transaction fee)
• Bonds (secondary market incorporates, Treasurys, munis, and CDs); available via agent only
• Single-leg options (limited number of spreads available via a live broker)
• A robo-advisor, Intuitive Investor, integrated into the website and app

Order Types

WellsTrade is not the broker for you if you require advanced order types. You can only place market, limit, or stop-limit orders online. There are no conditional orders available, and you can't place trailing stop orders. Market-on-open and market-on-close orders can be placed only with the assistance of a live broker (which triggers a $25 fee).

Trading Technology

Wells Fargo uses smart order routing strategies. However, they may accept payment for order flow for some trade types. Request their regulatory disclosures for details.

WellsTrade does not support backtesting or automated trading.

Costs

WellsTrade's commissions are mostly in line with the industry. There are two notable exceptions: the high fee for trading penny stocks and the base fee for trading options.

• No commission on stocks (except penny stocks) and ETFs.
• The commission on penny stocks (those priced at less than $1 per share) is the greater of $34.95 or 3.5% of the principal.
• Options per-contract fee is $0.65.
• Options exercise/assignment fee is $25 and must be done via a live broker.
• Fixed-income has a $50 fee per transaction for Treasurys and bonds.
• Mutual fund fee for those not on the no-transaction-fee list is $35.
• Margin interest on a $10,000 balance is 5.75%; on a $100,000 balance, it is 4.25%.
• There is no account closure fee; the termination fee for IRAs if the account holder is younger than 70½ is $49.95.
• The outgoing account transfer fee is $49.95.
• Outgoing wire fees are $30 for domestic and $40 for international.
• Check fees are $0 unless overnight delivery is requested; then the fee is $15.
• The live broker fee is $25 in addition to online fees.

How WellsTrade Makes Money

With fewer brokerages charging commissions these days, it's less obvious how they stay in business. Here are some behind-the-scenes ways WellsTrade makes money from you.

• Stock program: WellsTrade earns revenue by loaning stocks in your account for short sales. Unlike some brokerages, it does not share any portion of that revenue with you.
• Payment for order flow: Wells Fargo may engage in payment for order flow where they are earn money for sending some orders to certain market makers.
• Margin Accounts: When you borrow for margin trades, Wells Fargo charges you interest on the amount borrowed.

Account and Account Amenities

WellsTrade offers many of the account and research amenities you would expect from a large broker, including screeners, market news, and research reports.

Stock and ETF Screeners

The landing page for asset screening lets you look for stocks, ETFs, mutual funds, and bonds. The screeners have limited functionality, but you can create a trade ticket from the search results list. The company doesn't offer any preset screens, so you must make your own. It's possible to screen based on technical and fundamental indicators, and you can save a screen for future use.

Mutual Fund Screener

Wells Fargo has a mutual fund screener that allows you to search for funds using a lot of different criteria. It makes it easy to find no-transaction-fee, no-load funds, too. WellsTrade offers a recommended list for mutual funds, which is updated regularly.

Options Screener

WellsTrade does not offer an options screener.

Fixed Income Screener

The bond screener allows you to search through the available inventory for a bond that fits your specific needs, but you must place trades with a live broker. The screener supports munis, corporates, agencies, CDs, and Treasurys.

Tools and Calculators

You won't find any trade-specific tools and calculators. Still, WellsTrade customers have access to the “My Retirement Plan” savings calculator, which lets you check where you are today, see where you're headed, and get next steps and guidance.

Trading Idea Generator

WellsTrade offers a curated list of trades and securities screened by Wells Fargo Advisors research analysts.

News

Market news is provided and most of the research is created by internal Wells Fargo analysts. The news is real-time but not streaming, which means you have to refresh the list manually.

Third-Party Research

The research reports, market commentary, and investment recommendations are above average compared to the industry. Investors focused on long-term holdings will likely appreciate access to much of the sell-side research provided by WellsTrade. You can follow a specific Wells Fargo analyst if you find one who fits your investing profile.

Customers also have access to market reports from Wells Fargo Investment Institute, Wells Fargo Advisors Commentary Reports, Wells Fargo Securities, and Morningstar.

Charting

The charting functionality on WellsTrade is very basic compared to what many other platforms offer. You can choose a chart type (mountain, OHLC, candlestick, filled candles, line, bar, and dot) and select from various technical studies. The charting features may be adequate for buy-and-hold investors, but more frequent traders will be disappointed.

Cash Sweeps

You can earn a return on uninvested cash balances in your account with WellsTrade's sweep feature. There are three ways to earn a return: the standard bank deposit sweep, expanded bank deposit sweep, and a money market fund sweep. Eligibility is based on the type of investment account and the nature of account ownership.

Fractional Dividend Reinvestment

WellsTrade offers a dividend reinvestment plan, and you can reinvest some or all your cash dividends. You can enroll online or by calling customer service and requesting an enrollment kit. Dividend reinvestment does not include fractional shares.

SRI/ESG Research Amenities

WellsTrade customers can screen based on socially responsible investing (SRI) and environmental, social, and governance (ESG) factors via Morningstar.

Portfolio Analysis

The WellsTrade portfolio analysis tools are surprisingly robust. Investors can see charts, wheels, and tables that break down portfolio holdings by asset class. Performance reports are easy to access and very detailed, and you can customize them to show a particular period. The account landing page presents a view of the entire household, which you can customize as desired. You can customize the portfolio and define up to five different views, as well.

The asset allocation wheel lets you compare your portfolio to a variety of asset allocation models. There's a to-do list available that tells you what transactions you'd have to make to match your desired allocation model.

Still, some important portfolio analysis tools are missing from the WellsTrade lineup. You can't consolidate accounts from other financial providers to see a complete financial picture. Also, you can't estimate the tax impact of a proposed trade, and there are no tax reporting tools. The platform also lacks a trading journal.

Education

WellsTrade’s educational offerings are light to nonexistent, outside of FAQ pages, a glossary, and other brief snippets. There are no videos, no webinars, and the articles are short and lacking detail. New investors who struggle with basic concepts won't find much help. There's little help for navigating the WellsTrade platform and tools. For example, investors with limited experience screening for stocks may have trouble navigating the screening tools on their own.

Life planning tools on the Wells Fargo Advisors site cover marriage, job changes, divorce, and the like. The Retirement Center includes tips for planning for—and living in—retirement. Some educational content is included with the retirement planning tool, but it lacks any real depth. WellsTrade seems to focus mainly on clients who rely on support staff to help them with their questions.

Customer Service

The investment customer service phone number is available from 8 a.m. to midnight. There are no online chat capabilities, but live brokers are available during market hours.

Wells Fargo accepts only U.S. residents and citizens as clients.

Security and Reliability

Two-step verification lets you activate an additional layer of security when you access your accounts online by entering a unique Advanced Access verification code sent to your mobile device or phone or from an RSA SecurID device. Biometric entry is enabled for mobile apps.

Excess of Securities Investor Protection Corporation (SIPC) insurance from London Underwriters is available up to an aggregate limit of $1 billion (including up to $1.9 million for cash per client).

Wells Fargo / WellsTrade has had several well-publicized data breaches over the years, including one reported in May 2022.

Transparency

It's reasonably easy to find information about pricing, commissions, service fees, and margin rates on the Wells Fargo website (you have to get to the WellsTrade page and scroll down to “Pricing''). From there, you can click on the “WellsTrade Brokerage Commissions and Fees” page, which explains everything in detail.

As mentioned, Wells Fargo was at the center of many costly scandals in the late 2010s. In April 2018, Wells Fargo, the Consumer Financial Protection Bureau (CFPB), and the Office of the Comptroller of the Currency (OCC) reached a $1 billion settlement for mortgage lock and auto loan issues. The company paid out $2.09 billion for its role in the housing bubble just four months later. Since then, the company has had several minor data breaches that exposed the sensitive records of a relatively small number of customers.

Available Account Types

WellsTrade has the typical account types, including:

• Individual taxable
• Joint taxable
• Traditional IRA
• Roth IRA
• Simplified employee pension (SEP) IRA
• Education savings accounts (ESA) for college savers

Final Verdict

The limited tools and lack of education are unlikely to be attractive to most investors, except for buy-and-hold investors who already have a relationship with the company. However, the better-than-average research, good telephone support, and integration with other Wells Fargo accounts may be worth the disadvantages for the right investor.

Frequently Asked Questions

How Does WellsTrade Make Money?

WellsTrade makes its money through fees. It does not charge commissions when you trade stocks or ETFs, with two exceptions: agent-assisted trades cost $25 each, and online penny-stock trades cost $34.95 or 3.5% of the principal, whichever is greater. If an agent helps you with the penny-stock trade, you'll have to pay an additional $25.

Does WellsTrade Have Fees?

WellsTrade charges many different types of fees, including options fees, fixed-income fees, mutual fund fees (except for no-fee funds), account fees, transfer fees, wire fees, and live broker fees. WellsTrade's fees are comparable to those of other brokerages.

Is WellsTrade the Same as Wells Fargo Advisors?

WellsTrade is the online brokerage from Wells Fargo. It's not the same as Wells Fargo Advisors, which is the name of the company's group of 12,000 financial advisors who work under the Wells Fargo brand. Wells Fargo Advisors provide financial services including investment advice and wealth planning.

Is WellsTrade a Roth IRA?

WellsTrade is a brokerage, but it does offer Roth IRA accounts, along with traditional IRA accounts and ordinary taxable brokerage accounts. You can open a Roth IRA with WellsTrade and choose the investments you'd like to place in the account.