One-Stop Mutual Fund Shopping: A Guide to the Discount Brokers

by John Markese

One Stop Mutual Fund Shopping: A Guide To The Discount Brokers Splash image

Discount brokers deliver what mutual fund investors want: no-fee, no-transaction-cost mutual fund supermarkets. This year the survey tallied 30 discount brokers that levy no brokerage fees for buying and selling a select list of mutual funds.

Investors have been quick to recognize the convenience of one-stop mutual fund investing. They can buy or sell mutual funds from different fund families (including no-load funds), all through one broker. That means that if you are buying mutual funds, there is no need to contact different fund families to transfer accounts when changing fund holdings. While switching funds within a family is relatively easy and seamless, switching among fund families has significant costs in time and paperwork. With the mutual fund supermarkets, a few clicks or one phone call will do it. Purchasing new funds is easy, and although switching may entail some holding period limitations to avoid switch fees, the restrictions are usually reasonable, and the fees incurred are relatively small.

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There are some negatives, however.

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