Broker question...

[Orsorum]

This is a mild continuation of an earlier thread. I'm looking at two different brokers, for two or three different accounts.

I'm looking at opening a Roth IRA, starting to save for retirement, etc. - this is about 40 years away at this point. I'm also looking at some slightly more short term goals, including saving for college for my children (combination education IRA and maybe a state prepaid tuition plan) and having a normal brokerage account for income, etc.

With that being said, I have two brokers in mind - USAA Federal Savings Bank and Ameritrade. I think USAA would be a better choice for any long-term account, but Ameritrade might be appropriate for an account with more active management. USAA has a higher commission schedule...So, to be honest, I'm wondering if anyone has any thoughts or opinions on a choice between the two (or any others you've found to be useful).

 

[Orsorum]

Bump.

 

[Orsorum]

Originally posted by: Zakath15
Bump.

 

[Orsorum]

Originally posted by: Zakath15

Originally posted by: Zakath15
Bump.

 

[Orsorum]

Good lord, what does a man have to do to get some brokerage questions answered...

 

[kermalou]

go with charles schwab for both. they are great, my IRA is with them and there are no worries and the fees aren't that high for trades and such. since it's an IRA, you won't be making a lot of trades. for the state run plan go with a 529 plan from Rhode Island (you can use a different state).

out

 

[glenn1]

All else being equal, choose the one with (a) lower commissions, (b) lower fees, and be sure to check the self-directed IRA fee, and (c) the institution which specializes in brokerage is generally the better choice over an insurance agent, bank, etc. who also does brokerage.

 

[Orsorum]

Originally posted by: glenn1
All else being equal, choose the one with (a) lower commissions, (b) lower fees, and be sure to check the self-directed IRA fee, and (c) the institution which specializes in brokerage is generally the better choice over an insurance agent, bank, etc. who also does brokerage.

Something I hadn't thought about. AFAIK, USAA specializes in insurance (for veterans and families). Schwab might be a better choice...

 

[Orsorum]

Looked at the various fees for the different accounts...

I think it's now between Schwab and USAA. Commissions are low enough on both that I'm not worried about either; I'm not a very active trader. However, I am worried about account maintenance fees.

From Schwab
For Household Balances* of Quarterly Fee
$50,000 and above NO FEE
$10,000 to $49,999 $30
Below $10,000 $45
Fee waivers may apply if:
The accounts in your household have at least eight or more commissionable trades in the last 12 months.
A 50% fee reduction applies if:
Recurring net new deposits of $500 or more per month are scheduled through Direct Deposit and/or Schwab MoneyLink®, or through Automatic Investment Plan (AIP)** into any of your household's Schwab Accounts. (Due to contribution limits, some retirement accounts may not be eligible.)

From USAA
Brokerage Custodial Fee Fee waived if account meets any of the following conditions:
Commissionable trade executed in the last 12 months
Account has a margin balance
Account has at least $15,000 in aggregate assets per member with USAA Investment Management Company
Custodial accounts (UGMA, UTMA) are exempt from the fee

I'm thinking this may end up being a better choice...I have a net worth (in investments) of just around $16k, and if I do decide to open a more active brokerage account, I think Ameritrade may be the best choice for such an account. In the future, if I do end up having a larger brokerage account, I might transfer the Ameritrade over to Schwab... but I suppose that all remains to be determined.

But I have a couple weeks to make a decision; I have to decide if I'm going to make an IRA contribution soon (for 2002), but I'm leaning towards USAA.

More thoughts?