04-07-2016, 09:58 PM
(04-07-2016, 08:57 PM)Dividend Watcher Wrote:(04-07-2016, 06:34 PM)Caversham Wrote: However, my understanding is still this: Some brokerages (Schwab, Fidelty, Scottrade, E*Trade, etc) will begin charging annual fees as opposed to commissions. If my brokerage does this, then I will need to move my IRA. Is this not correct?
Did they tell you that? The competition is fierce for brokerage customers. I can assume they might for managed accounts if they can make more money from a flat fee rather than commissions but none of it is set in stone until they publish their fee schedule. I know TD Ameritrade has really been pushing their managed/advisory accounts for a while.
I think that's it. For money that they are actively managing for a customer for money, they will have to migrate from commissions to percentage fee because commission will not be so lucrative anymore. But this should not affect the commissions we pay to buy our shares.
And I agree that paying 1 percent to someone to throw you hard-earned money into what for most is essentially a balanced fund and then ignore it forever while collecting fees is unconscionable. But lots of people are really intimidated by investing, and they think they need a professional, as opposed to a few hours of reading. I have a sibling who fell into this trap. Put her IRA with a guy that her husband's family has used forever. When she realized I kinda know a little about this, she had me look over her holdings. I almost barfed. Eight different funds -- every single one of which had a front-end load of 3.75 to 5.75 percent, plus expense ratios way over average. We dumped that dude as fast as possible and moved her over to Vanguard. Got better funds for a tiny fraction of the cost. The guy has probably made a mint off the in-laws over the years. Ridiculous.