Use different companies for Roth IRA's?

[cologero]

Hi everyone,

I'm getting ready to contribute $5,500 into a Vanguard Roth IRA for 2013 (this is the first time I've contributed to a Roth). I will also be contributing the same amount into a Roth IRA in 2014. Is it better to contribute to the same company each year (i.e. Vanguard), or should I use other companies each time?

[Petunia 100]

What is your motivation for using more than one custodian? If it is access to different mutual funds without paying transaction fees, that is a good reason.

Personally, I believe you have already chosen an excellent investment vehicle for your Roth. My own Roth is also in a Vanguard Target Retirement Fund. I have no plans to open additional Roth accounts with other custodians.

[disneysteve]

The only reason to open multiple accounts would be to get access to investments that aren't all available in one place. Other than that, I would definitely stick to one company. You will, over time, enjoy lower fees and better services that way. For example, with Vanguard, once your account reaches a certain level, you get switched from Investor shares to Admiral shares which have a lower expense ratio. At some level, you also qualify for free consulting advice.

[cardtrick]

I agree with Steve. You only want to open a new account if you want other investment options. I opened my IRAs with a discount stock broker. I have my 401K invested in mutual funds, so I wanted an option to invest in individual stocks.

[disneysteve]

I agree with Steve. You only want to open a new account if you want other investment options. I opened my IRAs with a discount stock broker. I have my 401K invested in mutual funds, so I wanted an option to invest in individual stocks.

You could have used a company like Vanguard and then you could have done stocks and funds in one account. Their brokerage fees are pretty reasonable. They charge $7 for the first 25 trades per year if you have less than 50K invested and $7/trade with no limit over 50K ($2/trade over 500K).

[cologero]

Thanks everyone! Sounds like I'll stick with Vanguard for both. I'm not very knowledgeable with all of this yet, but I at least want to start taking advantage of Roth's right now.