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PDtax, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 4623
Experience:  35 years tax experience, including four years at a Big 4 firm.
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I would like to open a Roth IRA and am trying to decide where

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I would like to open a Roth IRA and am trying to decide where (eg, a bank vs online). Are there general rules of thumb as far as transaction fees, loads and management fees that I should look for? Does it make sense to consider having several Roth IRA accounts in mutual funds so that it's more diversified?

I am not a fan of multiple Roth accounts. Keeping track of the various statements, etc. is in my mind an unnecessary administrative burden. Establish the account in an institution you will be comfortable with. I like the ease of online accounts, but there will be times you will need to do business that can't wait several days for transfers or mail to be sent/received. The best administrator is an online firm with a local office for such transactions. With my special requirement that there be a bricks and mortar location, I like brokerages like Charles Schwab. They can combine low administrative costs and a recently expanded local physical presence. Your local banks offer similar services, but may not offer as many investment options as a full brokerage like Schwab. They will also likely want upfront commissions from the 'investment professional' who will interview you and offer to help. Once you have decided on a low cost administrator, the selection of investment vehicles is important. I have found Vanguard funds to be rightfully proud of their low costs of administration, which translates into higher returns for the investor. Other fund families, Fidelity and others, offer investment choices at low management costs as well. You will have to review their costs carefully before deciding what to invest in if you make those decisions yourself. Good luck with your investing choices, and thanks for asking for a JustAnswer.

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