TD Ameritrade Has Most Mutual Funds Available
I was recently disappointed because I couldn’t purchase the Mairs & Power Growth Fund (MPGFX) or Artisan International Fund (ARTIX) through my T. Rowe Price Roth IRA. After doing some sleuthing on Morningstar I discovered I could purchase both of these funds through TD Ameritrade, from whom I have a standard brokerage account.
I was ready to transfer all my assets over from TRP to TD Ameritrade and it turned out that transferring a Roth IRA was extremely bothersome. So instead of jumping into anything I thought I had better check to see if there was another discount broker that offered more funds, because I didn’t want to have to do this again. I spent some time at it, and put together a screen using the Morningstar Premium Fund Screener (more info) that would show the number of funds each major discount broker had available, and which funds were covered by all of them. The results were fascinating.
As it turns out, my beloved T. Rowe Price, with its excellent service and $35 commissions offered the least funds to be purchased, and TD Ameritrade, my favorite discount broker offered the most with roughly 10 times the number T. Rowe Price offered. Here are the results of my screen:
| Broker | # of Funds |
| TD Ameritrade | 14610 |
| Fidelity | 11341 |
| Scottrade | 10582 |
| E*Trade | 8738 |
| Schwab | 2828 |
| Vanguard | 1760 |
| T. Rowe Price | 1491 |
| Available from all | 227 |
*NOTE: Unfortunately, I wasn’t able to find Sharebuilder in the list of brokers on Morningstar.
I was surprised to see that so few funds were offered by all the big companies, suggesting that maybe it’s not a terrible idea to have funds from the top 3. In fact, if you had accounts from TD Ameritrade, Fidelity and Scottrade you’d have access to 15,700 funds. Now I’m not suggesting that you go ahead and open these accounts immediately. More accounts mean more hassles, and I would wait until there was a fund I couldn’t purchase before opening another account.
There doesn’t appear to be any adverse affects to owning multiple Roth IRA accounts, other than additional administration time on your part. The IRS treats all your Roth IRA accounts as one large account, and opening an additional account shouldn’t reset your 5-year holding clock. Motley Fool has an interesting article about multiple Roth accounts, which you should read if you’re thinking about opening another account. As always speak to a qualified professional (i.e. not me) before making any changes to your account, and I’ll keep you posted if anything happens with my move over to TD Ameritrade.
6 Comments Add your ownSubscribe
1. Vince | June 25th, 2006 at 10:44 pm
Interesting…. TD Amertrade is really causing a stink here up north with the way they are handling the merger. Just look at some of the dissappointed comments on my blog’s post about this issue! The funny thing is that one of the commentors apparently works for the company?? We’ll never know
2. Financial Methods&hellip | June 26th, 2006 at 3:36 am
Carnival of the Capitalists…
There are many great posts for this week’s Carnival of the Capitalists. I particularly enjoyed:Breakeven Point Before Real Returns at The Real Returns Circumventing Late Fee Anger at BusinesspunditCreative Job - Commute Helper at Personal Finance Advi…
3. Financial Options&hellip | June 27th, 2006 at 3:04 am
Tuesday Financial Reading…
As always you should give a look to the Carnival of Personal Finance, Carnival of Investing and Carnival of the Capitalists, but here were a few relevant posts that jumped out at me to relay here.
The Daily Bacon has an article on making sense of the…
4. Doug | June 28th, 2006 at 4:57 pm
Chris - I use TD Ameritrade (nee Waterhouse), because I like the research, more than for the mutual fund options.
What I like about Waterhouse are the five year cash flow, income statements and balance sheets (which include shares outstanding, so you can quickly see when balance sheet improvements came from selling additional equity). Makes it easier to do screens before slogging through the 10-Ks/Qs or 20-F/6-Fs at www.sec.gov.
Regarding mutual funds, I mostly invest in individual stocks now, and have only held onto one fund PRCGX, Perritt MicroCap, because it is tremendously well managed, and closed to new investors. Actually, I have considered selling some of my stake, because small cap companies are going to have real difficulty growing earnings with higher and higher prime rates. If you like the fund, consider the MicroCap opportunities fund (PRCOX, I think), which has the same manager and even fewer assets.
Questions - if you open all of these accounts at all of these brokers, doesn’t it make asset allocation difficult? You now do not have one pile, but three, and reallocating among them is really difficult.
What is your opinion of other brokers you have used based on their research?
5. Chris | June 28th, 2006 at 8:44 pm
Yes, reallocation is another problem I didn’t mention in the article. Many brokers charge fees to remove funds from your account, and it can take a long time to transfer non-liquidated assets between brokers.
I only have a TD Ameritrade, T.Rowe Price and Scottrade account. On the research front, TD Ameritrade is okay (although they claim to have a lot of new features coming), Scottrade is eh, although I haven’t used them too extensively, and T. Rowe Price is basically non-existant.
I personally use MSN Money and Yahoo Finance for my research. MSN has 10 years of financial data, and Yahoo! Finance archives conference calls on their site.
6. Doug | June 29th, 2006 at 5:30 pm
Chris - thanks for the assessment of the research options. I have to try MSN Money. I find that Yahoo Finance isn’t bad, but is missing a few key datapoints without which really wouldn’t want to proceed, namely, shares outstanding over time.
One more thought which is fee structure. Most brokerages have fee structures that are graduated. By law, the breaks must be clearly defined, and offered to everyone who qualifies. Generally, those breaks are based on either trades in a specific timeframe, total assets or amount of a trade, or some combination of the three. By splitting up your money, you will have lower pricing power at all of them, which may mean that you pay more in fees.
However, IRAs have low contribution levels, these fees (such as inactivity fees) are often waived for IRA accounts. In my case, I was actually charge a few bucks in inactivity fees in my regular brokerage account at Waterhouse (becuase there were a few six-month periods where I did not execute even one trade) until my combined balances there exceeded $25k (my IRA balances counted toward the total).
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