If you have an account with a full service Investment firm, do you have a fiduciary or a brokerage account? I have a brokerage account at Merrill Lynch and my husband has a brokerage account at Morgan Stanley.
Most people say it is better to have a fiduciary account because with that type of account your account manager has an obligation to do what is best for their client.
However, with a traditional brokerage account we only have to pay for a relatively small annual fee and a commission whenever we buy and sell stock. If we switched to a fiduciary account we would have to pay an annual fee based on a percentage of the net worth of our accounts which would be significantly more than we are paying now. Granted this may be practical for people who frequently buy and sell because with a fiduciary account you don’t have to pay any commissions. However, since we don’t trade very often we don’t pay that much in commissions.
I’ve seen these ads about brokerage vs fiduciary accounts. It makes sense but I tend to buy low fee ETFs and most of my money is in my 401k which has the lowest management fees in the biz (TSP, federal 401k). Any individual stocks I hold are long termers, the only time I sell them is when they are way up over a short time and then I’ll rebuy when they dip.
My wife and have both types of accounts at Fidelity.
My wife and I have our financial accounts at Fidelity. Our post-tax account is a standard brokerage account with mutual funds, ETFs and a few stocks that we manage. We incur no costs for that type of account, including no commissions, no fees (except whatever fees the mutual funds normally charge), etc.).
We each have IRAs and each of our IRAs consists of two parts. One part is a brokerage account, as described above, that we manage. The other part is managed by Fidelity and consists of two portfolios, one individual stocks and one individual bonds. That is a fiduciary account and we do pay a fee for that service (total around 0.45-0.5%, each segment carries a different rate).
Our rep is readily available to discuss financial matters when needed and we chat at least a couple of times a year, and may actually see him in person this year.
