Choosing a Mutual Fund Service Co for Roth IRA...

I am setting up a new Roth IRA and would like to know what the best choices
are between mutual fund service companies - i.e., Vanguard, T-rowe price,
fidelity, etc. Having a high performing portfolio of funds, ability to
transfer between funds, and low costs are important. Any recommendations?
Or sources of info? Thanks in advance for any advice.

I've had some bad experiences with Janus & Scudder in the past.

Re: Choosing a Mutual Fund Service Co for Roth IRA...

Based on my reading, I think Vanguard and Fidelity probably have the most
competitive account fees and mutual fund expense ratios.

I am a 20+ year Fidelity customer but I have considered Vanguard in the past
and have relatives who love it.

I do know Fidelity's representatives pretty consistently treat all customers
like royalty. This is so even when I was a puny, recent college graduate
with only a chump change IRA with it.

Stick with low expense ratio, no load, index mutual funds. There is evidence
to suggest they are the safest bet. Both Vanguard and Fidelity offer their
own funds that fit this criteria.

"Mike" <> wrote
> I am setting up a new Roth IRA and would like to know what the best
choices
> are between mutual fund service companies - i.e., Vanguard, T-rowe price,
> fidelity, etc. Having a high performing portfolio of funds, ability to
> transfer between funds, and low costs are important. Any recommendations?
> Or sources of info? Thanks in advance for any advice.
>
> I've had some bad experiences with Janus & Scudder in the past.

Re: Choosing a Mutual Fund Service Co for Roth IRA...

I have been a T Rowe customer for years (8) and would recomend them to
others. When I considered fund companies one issue I had with Fidelity
in particular was sorting which funds were load and which were no load.
My 401k is with Vanguard and if I were to leave my company, I would
transfter those funds to T Rowe...

Re: Choosing a Mutual Fund Service Co for Roth IRA...

Did you have access to the internet back then?

Do you realize that these days online sites like finance.yahoo.com ,
cbs.marketwatch.com , morningstar.com , as well as fidelity's own site,
among many other sites with free info on funds, readily indicates whether a
fund has a load or not?

"jIM" <> wrote
> I have been a T Rowe customer for years (8) and would recomend them to
> others. When I considered fund companies one issue I had with Fidelity
> in particular was sorting which funds were load and which were no load.
> My 401k is with Vanguard and if I were to leave my company, I would
> transfter those funds to T Rowe...
>

Re: Choosing a Mutual Fund Service Co for Roth IRA...

"jIM" <> wrote in message
news:
>I have been a T Rowe customer for years (8) and would recomend them to
> others. When I considered fund companies one issue I had with Fidelity
> in particular was sorting which funds were load and which were no load.
> My 401k is with Vanguard and if I were to leave my company, I would
> transfter those funds to T Rowe...

I'm with you, Jim. TRP is my primary. No manager musical chairs, not much in
the way of index funds. Reasonable fees. Way to go.

Re: Choosing a Mutual Fund Service Co for Roth IRA...

jIM wrote:
> When I considered fund companies one issue I had with Fidelity
> in particular was sorting which funds were load and which were no load.

This is no longer the case. All of Fidelity's mutual funds are no-load
now, including their Select/Sector funds. (Except for fidelity advisor
funds, but that's only if you go through an advistor, you won't find
those from the consumer website).

Re: Choosing a Mutual Fund Service Co for Roth IRA...

I think all 3 (V,T,F) allow you to upgrade to a brokerage acct, but the
only fidelity one is a real, grown up brokerage. In fact, unless there
is some small balance fee I think there are few reasons to get just a
fidelity mutual fund account since they pass on most privileges to your
brokerage; that is, it's kind of a superset account rather than an
alternative (now bracing for furious nitpicking of exceptions).

Another issue is how comfortable are you with their web environment for
both gathering info and taking action - take some test drives. I think
V is fine for gathering info and has the capability to take various
actions, but has an annoying philosophy of making it laborious or
restrictive to do things. What is it with Trp where screens are dense
collections with fine print? On a laptop these seem virtually
unreadable, and if you expand the font one iota the stupid menu system
breaks down since the clickable words no longer fit in their slots
which seem locked in pixel size.

Fid's web seems mostly magnificent, but allow me some bellyaching.
Although default fonts are readable size, it still seems cursed by this
pixel counting. If you have a lot of pixels, they waste them and just
use part of the screen. If you have few pixels, the stupid menu system
can break down as in TRP. I got on system with old screen but new
software and it took me forever to figure how to click menus that
extended off the edge of the screen (had to do repeated click-tab).
This seems a ridiculous step backwards from the scalable philosophy of
html to some prissy approach meant to look good on certain target
systems.

Furthermore, fidelity has allowed a vendor (I think) to let everyone
down with months of very spotty uptime for their "fullview" tool, which
can organize your whole financial life. Vanguard has a version, and
maybe Yahoo, but the fidelity one is excellant - how can they tolerate
it only being up for a few random hours at a time!

Re: Choosing a Mutual Fund Service Co for Roth IRA...

dumbstruck wrote:
>
> I think all 3 (V,T,F) allow you to upgrade to a brokerage acct, but the
> only fidelity one is a real, grown up brokerage.

Agreed. The others appear to be offering brokerages simply as a
convenience for their fund customers.

A question is whether a brokerage is a necessary or superior option.
That depends on what one is going to invest in. The OP wanted "a high
performing portfolio of funds, ability to transfer between funds, and
low costs."

If a single fund family provides sufficient variety of solid funds at a
fair cost, then the brokerage isn't needed. And if one goes with NTF
funds through a brokerage, one is often limited to higher expense funds
than one might invest in directly.

This MSN article mentions the cost problem with fund supermarkets, and
goes on to discuss strengths and weaknesses of various fund families
(including costs). It's about a half year old, so it is still current.
I recommend it to the OP who was looking for sources of info on
different fund services.


> In fact, unless there
> is some small balance fee I think there are few reasons to get just a
> fidelity mutual fund account since they pass on most privileges to your
> brokerage; that is, it's kind of a superset account rather than an
> alternative (now bracing for furious nitpicking of exceptions).

Nah. Too easy :-)

But since you brought up fees, it is worth comparing IRA fees:

T. Rowe Price (funds only): $10/fund, if under $5K in the fund


T. Rowe Price (brokerage): $25 if under $10K in account


Vanguard (funds only): $10/fund, if under $5K


Vanguard (brokerage): $30


Fidelity (funds only): $12/fund, if under $2K
Fidelity (IRA brokerage): Same as above
(p.
5)

Bottom line: Fidelity cheaper whether using funds only or brokerage.

(Note that all the brokerages above waive fees if total assets,
including other accounts, are high enough, e.g. Vanguard waives
brokerage maintenance fee for Voyager clients - those with $250K+)

> Another issue is how comfortable are you with their web environment for
> both gathering info and taking action - take some test drives. I think
> V is fine for gathering info and has the capability to take various
> actions,

I find it does a better job than most in presenting fund info compactly,
e.g. if you browse by family, it tells you up front what all the
available families are, and whether they offer some funds NTF. Then it
shows you data on all funds in that family, on a single page.

In contrast, Fidelity requires you to walk through lists of families
(select starting letter of family), and then gives you a list of links.
Following a link gives you data on one fund. Then you have to back up
to look at a different fund.

For some reason, Fidelity's server is very slow in displaying the fund
families by first letter.

> Furthermore, fidelity has allowed a vendor (I think) to let everyone
> down with months of very spotty uptime for their "fullview" tool, which
> can organize your whole financial life. Vanguard has a version, and
> maybe Yahoo, but the fidelity one is excellant - how can they tolerate
> it only being up for a few random hours at a time!

Fidelity uses Yodlee software (which they tell me they have brought in
house, so you should complain to Fidelity's IT department if it is not
up when you want it).

Vanguard uses CashEdge.

To cite myself:
news: or



--
Mark Freeland