Best Mutual Fund/ETF platform for self-directed trading?

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astroboy_888
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Best Mutual Fund/ETF platform for self-directed trading?

Post by astroboy_888 » Mon Mar 14, 2011 7:14 am

Hi all:

I am a new read of Bogleheads. I am looking for a good platform to do self directed investment. I've had a managed IRA account for the past few year (Citi Wealth Management) and the performance with respect to fees just isn't justifiable anymore.

I think I will be holding primarily Vanguard and PIMCO funds. What are the best platforms in your opinion in terms of features and commission/fees? What other things should I be looking at?

I am currently looking at Fidelity, Wellstrade (Wells Fargo Advisory), eTrade.

Vanguard seems good, but I am not sure if non Vanguard funds are accessible with a reasonable fee structure.

Thanks for your opinion.

pkcrafter
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Post by pkcrafter » Mon Mar 14, 2011 10:11 am

It sounds like you want to do something other than what we advocate here. If you want to trade funds, which we don't recommend, then do not use Vanguard funds because they don't play the kickback game, so you will pay transaction fees at almost any brokerage.

Here is a M* forum where posters do what you want to do. You will find a current thread on Wells and there are several earlier threads if you want to look back a few pages.

http://socialize.morningstar.com/NewSoc ... ageIndex=1


Paul
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livesoft
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Post by livesoft » Mon Mar 14, 2011 10:25 am

As you have already commented in the WF thread, you know about their problems with mutual funds nowadays. Maybe they will fix all that eventually.

WF is a great solution for ETFs and stocks if you qualify for free trades. I like them a lot and have had an account with them for many years. I had a couple of Vanguard mutual funds with them, but sold earlier this year. I do have a Schwab mutual fund held at WF in two accounts.

TDAmeritrade is another good choice. They have free trades on a select group of ETFs including some Vanguard ETFs. I have had an account with them for almost 15 years. I have bought funds with them as well about a decade ago without any problems. They have an extensive list of funds, but Vanguard funds are not in the no-transaction-fee network.

Fidelity is often mentioned on the forum. I have a 401(k) with them and helped my daughter start a Roth IRA with them. They have free trades on a limited selection of ETFs. They also have plenty of NTF mutual funds.

Then there is Vanguard. Vanguard has a seam-ful operation when it comes to its mutual funds and its brokerage. They might as well be completely separate for someone who makes more than 2 transactions a year.

Schwab? Also mentioned here. I have no experience.

I think these 5 places are the ones to look at. Fidelity, Schwab, and TDAmeritrade have local offices which you may wish to take advantage of. WF has local banks, but the brokerage is not really associated with those banks. Vanguard is, well, Vanguard.

Other places that folks have mentioned are E-Trade and Scottrade. They seem to be non-starters for me since they charge commissions when everyone else has free commissions on the things I would use.

If I was to pick only one of the above, I would pick WellsFargo. I would not "trade" mutual funds either.
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LazyNihilist
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Post by LazyNihilist » Mon Mar 14, 2011 7:08 pm

livesoft wrote:
TDAmeritrade is another good choice. They have free trades on a select group of ETFs including some Vanguard ETFs. I have had an account with them for almost 15 years. I have bought funds with them as well about a decade ago without any problems. They have an extensive list of funds, but Vanguard funds are not in the no-transaction-fee network.
For ETF's if you qualify for WF 100 free trades/year, thats the way to go. But if not, then TDAmeritrade is the best choice. I use TDAmeritrade and am happy with them. They provide most Vanguard ETF's commission free. Only VXUS ETF is not commission free.

Also, as pkcrafter and livesoft have said above, Bogleheads advice is to buy and hold for the long term (low cost diverse index funds of course).
The strong do what they can and the weak suffer what they must -Thucydides

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astroboy_888
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Post by astroboy_888 » Tue Mar 15, 2011 4:34 am

Thanks for the your recommendation. I should say that I might have used the wrong words - I don't intend to trade mutual fund per-say, but just to find a platform that is low cost, consistent, and allow me to make adjustments and rebalanced over time.

I have found that over the years, the stability of the company hosting the platform is important. This is one of the key things I am looking for. A company that U can grew with for the long term.

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Post by jpark1982 » Tue Mar 15, 2011 8:59 am

What type of portfolio size are you going to be working with? Merrill Edge has access to both PIMCO and Vanguard funds. Vanguard with no transactions of which other brokers charge (Etrade - $20, Schwab - $50, TD Ameritrade/Fidelity - $75). But if your porfolio isn't over 50k you'll pay $25/quarter. Also if you have 25k in cash balances with BoA or Merrill's CMA you get 30 trades per month (stocks and ETF).

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Post by livesoft » Tue Mar 15, 2011 9:03 am

astroboy_888 wrote:I have found that over the years, the stability of the company hosting the platform is important. This is one of the key things I am looking for. A company that U can grew with for the long term.
I agree that stability is helpful, but alas it may be too much to ask.

I was with TDWaterhouse which got bought by Ameritrade.
Vanguard Brokerage Service was with Pershing and changed.
WellsTrade switched to WellsFargoAdvisors
Schwab has had lots of changes
E-trade has had lots of changes

You are only left with Fidelity. :)
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Post by pkcrafter » Tue Mar 15, 2011 11:57 am

If you are looking for a broker that won't pull the rug out from under you, avoid Wells and Merrill and the really cheap new brokerages. One step further--don't use an investing approach that requires changing funds. Use Vanguard and Vanguard funds and avoid constant portfolio changes.



Paul
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anthau
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Post by anthau » Wed Mar 16, 2011 9:16 am

I think the answer depends upon a few factors: How large is your account? Will you be using mutual funds, ETFs, or a combination of the two? Will you be using a two or three-fund allocation, or a more complicated one?

If you're going to use a simpler allocation, or if you're going to stick with one "flavor" of funds (ETF or mutual fund) and Vanguard's available options cover the asset allocation you want, go straight to Vanguard (from these boards, I read that Vanguard's mutual fund side and brokerage side are not well integrated, hence the "one-flavor" question).

If, however, you're going to mix ETFs and mutual funds, then depending upon your account size, I'd say go with Fidelity, unless their mutual fund minimums won't accommodate your asset allocation; then, Scottrade.

I know that many on the boards recommend Wellstrade, Schwab, or TD Ameritrade for their free ETF trades. They may be right. But I expect these companies will one day slam the door on this; only time will tell.
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astroboy_888
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Post by astroboy_888 » Sat Mar 19, 2011 8:20 am

About $130K account value in an IRA. Thanks you.
jpark1982 wrote:What type of portfolio size are you going to be working with? Merrill Edge has access to both PIMCO and Vanguard funds. Vanguard with no transactions of which other brokers charge (Etrade - $20, Schwab - $50, TD Ameritrade/Fidelity - $75). But if your porfolio isn't over 50k you'll pay $25/quarter. Also if you have 25k in cash balances with BoA or Merrill's CMA you get 30 trades per month (stocks and ETF).

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astroboy_888
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Post by astroboy_888 » Sat Mar 19, 2011 8:42 am

My account value in IRA is about 130K, with another 36K non IRA to invest. Sadly this used to be a 200K combined, but goes to show you sometimes "professionally" managed accounts isn't a good idea.

I am think about using a Vanguard target retirement fund such as VTTHX (64% US stock, 25% World stock, and 11% bond) as a core fund (75-80% of account) to anchor my account. Then buy additional ETF or Funds to tweak the allocation. Probably thinking about adding ~5% VNQ (REIT) or maybe another 10% in quality multi-sector bond fund (PONDX?) or BND bond index ETF. Then last 5 percent more in small (VB) or mid cap ETF depend on what makes sense at the time. Does this approach make any sense?

I am looking seriously at Wells Fargo despite their limitation or Fidelity. The 100 free trade a year at WF (for PMA relationship customers) maybe too good to pass up. I figure I probably will only be using a handful of free trades a year. I can probably live with the fact that PIMCO funds are no long available. (Who else are experts at fix income funds/ETF?)

On the other hand Fidelity is offering 200 free trades if one opens up a 100K + account. Though only applies to stocks and ETF.

anthau wrote:I think the answer depends upon a few factors: How large is your account? Will you be using mutual funds, ETFs, or a combination of the two? Will you be using a two or three-fund allocation, or a more complicated one?

If you're going to use a simpler allocation, or if you're going to stick with one "flavor" of funds (ETF or mutual fund) and Vanguard's available options cover the asset allocation you want, go straight to Vanguard (from these boards, I read that Vanguard's mutual fund side and brokerage side are not well integrated, hence the "one-flavor" question).

If, however, you're going to mix ETFs and mutual funds, then depending upon your account size, I'd say go with Fidelity, unless their mutual fund minimums won't accommodate your asset allocation; then, Scottrade.

I know that many on the boards recommend Wellstrade, Schwab, or TD Ameritrade for their free ETF trades. They may be right. But I expect these companies will one day slam the door on this; only time will tell.

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Post by livesoft » Sat Mar 19, 2011 9:02 am

astroboy_888 wrote:... Does this approach make any sense?
Not to me. If one is going to go outside TargetRetirement funds, one might as well put everything outside. One should have a true legitimate Asset Allocation plan and an Investment Policy Statement that one follows.
I am looking seriously at Wells Fargo despite their limitation or Fidelity. The 100 free trade a year at WF (for PMA relationship customers) maybe too good to pass up. I figure I probably will only be using a handful of free trades a year. I can probably live with the fact that PIMCO funds are no long available. (Who else are experts at fix income funds/ETF?)
Who said PIMCO funds are no longer available? I saw someone complain about a SINGLE pimco fund. What about all the other PIMCO funds? When working with one's money, it behooves one to check out the facts. Go ask WellsFargo.

Anyways, WellsFargo, TDAmeritrade, Fidelity, Vanguard, and even Schwab are contenders. Scottrade is not a contender because of its costs, its cash transfer policies, and other quirks (but don't believe me, go check it out yourself).

However, if you end up with a TargetRetirement fund, then you limit your options to Vanguard and WellsFargo. The reason is that to my knowledge the Target Retirement funds with the lowest fees are Vanguard's and the Target Retirement funds which have index funds in them are Vanguard's. The only places to buy Vanguard funds without commissions are Vanguard and WellsFargo and maybe BoA/MerrillEdge. (Search on Merrill on the forum for all the nice things folks write about Merrill.)
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Post by astroboy_888 » Sun Mar 20, 2011 6:33 am

Thanks for your comment!

PIMCO retail class funds such as PTTDX and PONDX (only two I cared about) can not be traded in Wellstrade any longer post Wachovia Advisor platform switch. Upon submitting a buy order I get:

---------
Errors:

The Mutual Fund symbol entered cannot be traded online. (MBY:N:S:00542)

For assistance in placing this trade, please Contact Us.
--------

However PTTRX is available (Pimco Total Return Institutional Class) and requires a minimum purchase of 1 million dollars according to an order I submitted in Wellstrade.

I spoke with Wellsfargo Advisor, they have no idea why it wasn't available anymore where as old Wellstrade was available. After sometime on the phone with the person helping me, he could not get a straight answer from formerly Wachovia security side. They connected me to a trader so that I can request a trade for PONDX, the trader talks to the trade desk and comes back to tell me exactly the same thing that was shown on line which is I can't buy or sell that mutual fund. He had no idea why either.

Thanks for telling me about Merrilsedge, I shall check it out!
livesoft wrote:
astroboy_888 wrote:... Does this approach make any sense?
Not to me. If one is going to go outside TargetRetirement funds, one might as well put everything outside. One should have a true legitimate Asset Allocation plan and an Investment Policy Statement that one follows.
I am looking seriously at Wells Fargo despite their limitation or Fidelity. The 100 free trade a year at WF (for PMA relationship customers) maybe too good to pass up. I figure I probably will only be using a handful of free trades a year. I can probably live with the fact that PIMCO funds are no long available. (Who else are experts at fix income funds/ETF?)
Who said PIMCO funds are no longer available? I saw someone complain about a SINGLE pimco fund. What about all the other PIMCO funds? When working with one's money, it behooves one to check out the facts. Go ask WellsFargo.

Anyways, WellsFargo, TDAmeritrade, Fidelity, Vanguard, and even Schwab are contenders. Scottrade is not a contender because of its costs, its cash transfer policies, and other quirks (but don't believe me, go check it out yourself).

However, if you end up with a TargetRetirement fund, then you limit your options to Vanguard and WellsFargo. The reason is that to my knowledge the Target Retirement funds with the lowest fees are Vanguard's and the Target Retirement funds which have index funds in them are Vanguard's. The only places to buy Vanguard funds without commissions are Vanguard and WellsFargo and maybe BoA/MerrillEdge. (Search on Merrill on the forum for all the nice things folks write about Merrill.)

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Post by lambdapro » Sun Mar 20, 2011 8:14 am

The problem that some appear to be overlooking is the monthly contributions to funds. That is why I am having trouble trying to use Vanguard from my 401K account. There are the typical comments about trade avoidance but how about monthly contributions. When it is $50 per Vanguard transaction at Schwab and $30 per Vanguard transaction at Hewitt 401K, that puts a crimp in an efficient diversified monthly contribution.

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