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|
|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.