For now, and assuming you have 25K, that is...
A couple of weeks ago to compete with Bank of America (as well as offerings from regular investment firms) Wells Fargo upped the ante in the commission battle. It began providing 100 free trades through its WellsTrade brokerage account when linked with a portfolio management account if you meet the minimum balance (the aforementioned $25,000).
Unlike BofA, which requires 25K in a low yield savings account specifically, you just need $25,000 in assets at Wells Fargo. Checking, savings, brokerage, even 10% of outstanding loans qualify.
With 100 free trades you can get any stock, and even better, any mutual fund or ETF at no cost. Most brokerages have a selection of 'no transaction fee' funds, but they aren't always the best. With the Wells Trade account, you can get Dodge & Cox, Bridgeway or Vanguard funds (or almost any of your choosing) without having to set up an separate account with each fund (or pay transaction fees if at a broker).
Granted, the 100 free trades probably won't be a long term offer, but it's a great deal if you're looking to reorganize your investments or want to consolidate and simplify accounts. Unfortunately Joanne & I already did the consolidation thing with Fidelity in December, so we can't take advantage of this right at the moment.
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So I had an appointment with a Wells Financial Consultant today... and am trying to figure out if I really want to manage my investments or have someone else do it for me. It seems to me that I wouldn't be able to spend the amount of time necessary to properly follow the stock market – thus would invest in Mutual Funds. And if using the 100 free trades for Mutual Funds… is it worth it?! Will I really be altering my portfolio of Mutual Funds that much in a year? The only fee difference I could see is the annual IRA fee of $40 if using a financial consultant at Wells vs. $30 if using Wells Trade (independently managing your portfolio). Mutual Fund fees seem to be 1.5% to 5%, regardless of a Financial Consultant being used (although the little booger may be hiding something to get my business =P). I’m still researching… and with this research, come more questions…
I would argue, yes it is worth it. no, you don't need 100 trades a year for mutual funds, but what you get from that is:
A. the ability to buy into any mutual fund you want at no charge. At fidility for example, if i want to buy a vanguard fund, or DODFX, it costs $75 to buy (0 to sell). Scottrade is $17 each way. Wells Fargo is $0.
B. The ability to buy ETFs (mutual funds that trade as stocks basically) at no cost.
The IRA custodial fee is waived with over $20,000 or a linked PMA acount ($25k) in assets, so you're good there.
If you only need 10 of the trades, great. but the big thing is you get the convenience of doing everything at one place rather than an account here, an account there, all with (for some indeterminate amount of time) no transaction costs.
If you don't feel like you know enough yet about asset allocation, or how you want to invest, pick a target retirement fund (Vanguard 2040 for example) that will provide a good amount of diversification while you develop your plan.
The big thing, not to rush you, is if you have not yet started an IRA, the 2006 contribution is due by April 17.
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