Here’s my situation, I currently have some money in a combination of Roth IRA accounts and also non-tax-sheltered investments with someone who calls himself a financial advisor with VSR. He gets a commission based on what he has me buy. I don’t like this arrangement because he wants me to buy and sell too often. I’m always having to fill out capital gains/losses on my taxes because of the high frequency of how often he wants me to move my money around. I’m 35, and I just want my stuff to sit, and then only buy when I have new money to invest.
I’m not asking what I should do with my money, nor am I asking if I should get away for this person. I’ve either already made the decision to take my money out of the expensive advisor. I’m only giving all this information for background. I hate it when people ask questions on here and don’t give any background. The questions I have today are 2 things.
1. What kind of self-serve online broker do you suggest. I’m specifically looking for something that has a low fee for buying mutual funds. I don’t plan on buying individual stocks. The "free" site Zecco looks good to me, but it costs to buy a mutual fund. What discount broker is good for somebody who wants to buy mutual funds with the intention of keeping them long term. Specifically, something with a low/no buy/sell fee, and no annual fees. I’m going to be in mutual funds, and have both Roth IRA’s and "regular" non-tax-sheltered accounts.
2. Once I decide what brokerage company to go with. What process would I go through to smoothly move my money away from the expensive personal financial advisor, and to the discount broker? I don’t want to sell what I have because I don’t want to do any more capital gains/losses than I have to. I have about half of my total "portfolio" in a money market account right now (long story – not important). I want to wait to buy mutual funds with it after I open the discount brokerage account.
I will select the best answer, not necessarily the first answer, so please take your time.
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rz8ur4 19th March 2010
1. Scottrade or Sharebuilder would be my recommendations (I use TD Waterhouse in Canada). Check to see if there’s a minimum balance requirement to avoid administrative fees–will they waive it for a new customer? All of them will charge for trades done on an exchange for stocks or ETFs (exchange traded funds). $10 to buy a mutual fund is ridiculous. Make sure the broker you choose has good customer service ratings.
2. After opening the account(s), work with the rep from the discount broker to complete forms to transfer your mutual funds "in kind" to the account(s). Note that some mutual funds may not allow for transfer and may require you sell (or you can leave them with the advisor until they can be sold). You can likely find info about that in the mutual fund prospectus (if your financial advisor did not provide you with one–and should have–you can probably find it online as a pdf). Also, before selling any mutual fund, determine if there are any back end loads or early redemption fees/penalties to sell. Again, should be in the prospectus or you can call the mutual fund company customer service line.