As a financial advisor one of the biggest frustrations about our industry is for the young investor that want to get started investing into an IRA.
Why is it frustrating?
Because most big firms don’t want to help new investors.
Otherwise known as “small investors”.
Yes, you can walk into an Edward Jones office and open an IRA, but you’re going to have to pay an annual custodial fee.
They aren’t the only ones. All big brokerage firms will charge $40-$75 per year just to have the account open.
In addition, some firms will charge you a small account fee if you don’t generate enough commissions or fees or the year.
Over and above that, you’re either going to have to pay a commission for each mutual fund, stock or ETF trade that you place or you have to pay an advisory fee which will be anywhere from .75% to 1.5% of your account balance.
As you can see, yes you can open the account with a big brokerage firm, but they’re going to gouge you in fees making it nearly impossible for any new investor to make any money.
So what’s the alternative?