consumer due diligence with investment firms

Recent thread that wandered into discussion of how to get best price on a new auto prompts me to ask the following:

Let's say I've got all my defined-contribution retirement money (individual, not employer or government) stashed in IRA's at two firms, for example Schwab and Fidelity. Dollar amounts currently in low six figures at both firms, invested in a handful of stock and bond funds at each, no active trading. Let's further say I have a long-term (more than five years) horizon before contemplating any withdrawals, have potentially some additional chunks of cash to invest (useful as bait to dangle!), and am geographically blessed by bricks-and-mortar offices for both firms located within easy traveling distance.

If I request a "check-up" appointment with each firm at their local office, what should I be asking each firm about costs and services? I have no idea if I'm getting full value from each firm. Should I be looking for an assigned personal advisor? How to determine annual fees? Possible benefits of consolidating everything at one firm (not something I am naturally inclined to do)? Whether my investment allocation choices are comparable at both firms (I tend to think they are)? How the bricks-and-mortar office can benefit me compared to an on-line-only firm such as E-Trade?

-Mark Bole

Reply to
Mark Bole
Loading thread data ...

Schwab and Fidelity both offer commission schedules on line so you can see what rates you'd get with the balances you'd offer them. If you are not planning to trade much, that may not be a benefit to you. In general, they will offer a review of your portfolio and suggest how to rebalance with a tilt toward their own funds. I'd have to wonder, if one has a million dollars of stock, and no trading at all, what value that brings the broker? I understand they make margin money lending you shares, but retirement accounts cannot be margined, so it seems to me that $10,000, or $10 million, how does the broker benefit? I believe that for a relatively low (25k?) balance, you'd have no annual fee. I'd prepare some simple questions, from here, and play dumb, then evaluate their answer. Don't be shocked that the people you sit with know less than you, that points more toward your knowledge than their ignorance. JOE

Reply to
joetaxpayer

You might want to ask - what will you give me if I move all of my money to you. There may be bennies which kick in with large amounts of money (these bennies may be of no value to you)

To Joe Taxpayer. The Schwabs and Fidelities get money from the non-propriety firms like Janus for carrying their funds. In some cases (Janus) these costs are included in the expense ratio, others like Neuberger and Berman set up a separate fund (the N&B Trust funds) which carry a slightly higher expense ratio (about 0.1%)

>
Reply to
Avrum Lapin

I have accounts with both companies and I know both companies will do a financial check up for you. In fact you can do a portfolio check on both companies' web sites. Both will also offer fee based management service, probably to the tune of 1% of your portfolio value (or lower, depending on the size of your portfolio).

Reply to
PeterL

I understand the money the brokerage houses make from fund expenses. I don't know where their profit is to be made from a stock-only portfolio in a non-margin account with no further trading activity.

Reply to
joetaxpayer

You are right they don't make any money from this account. It's a lose leader for them. Bottomline is there arent' that many accounts like that. So don't cry for them joetaxpayer. They make enough money as is.

Reply to
PeterL

BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.