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Posted by on June 25, 2007, 5:08 am
Hi all,
I'm looking for some advice. I'm looking to start up an IRA and it
seems that the #1 and #2 for online brokers is Schwab and Fidelty,
respectively, although it seems those two could even be flipped. I
thought I would do some reasearch to make a choice between the two,
but as a novice, I'm finding it hard to find some definitive sites
that would compare both. I just want to figure out the layman's ins
and outs and the important differences that exist. Both houses seem
sort of neck in neck. Anyone here have a preference for one over the
other or know a well-regarded site/source that would at least offer
authoritative a review of both?
Thanks in advance for your assistance,
BL
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Posted by Ron Rosenfeld on June 25, 2007, 8:30 am
On Mon, 25 Jun 2007 04:08:27 -0500, cineman74@gmail.com wrote:
>Hi all,
>I'm looking for some advice. I'm looking to start up an IRA and it
>seems that the #1 and #2 for online brokers is Schwab and Fidelty,
>respectively, although it seems those two could even be flipped. I
>thought I would do some reasearch to make a choice between the two,
>but as a novice, I'm finding it hard to find some definitive sites
>that would compare both. I just want to figure out the layman's ins
>and outs and the important differences that exist. Both houses seem
>sort of neck in neck. Anyone here have a preference for one over the
>other or know a well-regarded site/source that would at least offer
>authoritative a review of both?
>
>Thanks in advance for your assistance,
>BL
I cannot compare the two, but I've been satisfied with Fidelity for many
years.
My first online brokerage was ETrade, and I had both ETrade and Fidelity
for a number of years. I gave up ETrade when it became apparent that their
policies on withdrawal of funds from IRA accounts was less flexible than
was Fidelity, and that they were not going to change that policy.
I have no opinion or experience regarding Schwab.
--ron
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Posted by Sandra Loosemore on June 25, 2007, 9:45 am
> On Mon, 25 Jun 2007 04:08:27 -0500, cineman74@gmail.com wrote:
> >I'm looking for some advice. I'm looking to start up an IRA and it
> >seems that the #1 and #2 for online brokers is Schwab and Fidelty,
> >respectively, although it seems those two could even be flipped. I
> >thought I would do some reasearch to make a choice between the two,
> >but as a novice, I'm finding it hard to find some definitive sites
> >that would compare both. I just want to figure out the layman's ins
> >and outs and the important differences that exist. Both houses seem
> >sort of neck in neck. Anyone here have a preference for one over the
> >other or know a well-regarded site/source that would at least offer
> >authoritative a review of both?
>
> I cannot compare the two, but I've been satisfied with Fidelity for many
> years.
>
> My first online brokerage was ETrade, and I had both ETrade and Fidelity
> for a number of years. I gave up ETrade when it became apparent that their
> policies on withdrawal of funds from IRA accounts was less flexible than
> was Fidelity, and that they were not going to change that policy.
>
> I have no opinion or experience regarding Schwab.
If the OP is just starting out, IRA withdrawals are probably not an
issue. Probably more important is whether the web site is
user-friendly, the choice of investments available, and fees. If
there are particular funds you're interested in, you might look for a
brokerage that offers them NTF, or invest directly with the company
running the fund.
I've heard Fidelity charges a $75 transaction fee to buy or sell funds
outside their NTF network. It's only $20 at E-Trade, where I have my
account. I have no experience with Schwab, either. The other
"supermarkets" to look into are Scottrade and TD Ameritrade. Besides
Fidelity, Vanguard and T. Rowe Price also offer brokerage services for
funds outside their own company.
-Sandra the cynic
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Posted by Default User on June 25, 2007, 1:38 pm
Sandra Loosemore wrote:
> I've heard Fidelity charges a $75 transaction fee to buy or sell funds
> outside their NTF network.
Somewhat less than that, $49.95 for online/phone transactions.
Broker-assisted ones are an extra $25, so that's probably where the $75
comes from.
<http://www.schwab.com/public/schwab/home/fees_commissions/commission_sc
hedule>
Brian
--
If televison's a babysitter, the Internet is a drunk librarian who
won't shut up.
-- Dorothy Gambrell (http://catandgirl.com)
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Posted by Mark Freeland on June 25, 2007, 7:51 pm
>> On Mon, 25 Jun 2007 04:08:27 -0500, cineman74@gmail.com wrote:
>> >I'm looking for some advice. I'm looking to start up an IRA and it
>> >seems that the #1 and #2 for online brokers is Schwab and Fidelty,
>> >respectively, although it seems those two could even be flipped.
Correct (though depending on how you classify brokers, and quantify size,
Merrill Lynch could be in that same group).
"The nearly $2 trillion in accounts at Fidelity and Schwab comprises 80% of
the cash in discount brokers."
http://www.smartmoney.com/brokers/index.cfm?story=august2006
(SmartMoney 2006 Broker Survey)
> [...] Probably more important is whether the web site is
> user-friendly, the choice of investments available, and fees. If
> there are particular funds you're interested in, you might look for a
> brokerage that offers them NTF, or invest directly with the company
> running the fund.
Another factor which matters to some people is whether one can walk into an
office. I believe Schwab is still pretty far ahead of Fidelity in number of
branches, though Fidelity has a solid network of offices. E*Trade has
fewer, though it appears to have been building up its branches since the
last time I looked.
> I've heard Fidelity charges a $75 transaction fee to buy or sell funds
> outside their NTF network.
It is $0 (free) to sell any fund online. Also, even though the first
purchase can cost $75, subsequent purchases of non-NTF funds, entered
through their periodic investment system, cost only $5 (and one can turn off
automatic investments at any time).
> It's only $20 at E-Trade, where I have my
> account. I have no experience with Schwab, either.
I prefer Fidelity to Schwab - Schwab keeps changing its fee structure
(currently it is presenting a simplified fee schedule), it had dropped 24
hour phone support a few years back (since restored). On the plus side for
Schwab, it occassionally offers a load fund NTF (load waived), e.g. Victory
Funds.
Both provide fine service, and I don't believe you would go wrong with
either one.
> The other "supermarkets" to look into are Scottrade and TD Ameritrade.
> Besides Fidelity, Vanguard and T. Rowe Price also offer brokerage
> services forfunds outside their own company.
There are a lot more supermarkets than that. Check, for example, the
SmartMoney link above.
Vanguard has a (IMHO well-earned) reputation for poor brokerage service.
Start with its $30/year maintenance fee (for <$250,000 investors). Even
American Century has a brokerage. (IRA annual fee of $50 until you reach
$10,000).
Generally, the fund companies that offer brokerages do it as a convenience
for their fund investors, not as solid standalone operations. (Fidelity is
the exception.)
For a basic buy-and-hold IRA, pretty much any brokerage with a no-fee IRA
and the funds you want NTF will do. If you're interested in trading stocks
or ETFs, then you'll want to look at quality of execution (e.g. how good a
price they get for you - a penny price improvement here and there adds up)
as well as commissions.
Mark Freeland
BnetOnewsX@sbcglobal.net
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