Author Topic: Discount Brokerages, Vangard and USAA  (Read 5496 times)

curlycue

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Discount Brokerages, Vangard and USAA
« on: January 15, 2015, 01:39:14 PM »
I'm thinking that investing with a discount brokerage is the direction I want to go, but I'm not clear which firms are discount brokerages. It doesn't seem like Vangard is, but I'm wondering why so many people on here invest with Vanguard if it is not a discount firm. Also, USAA Brokerages was given a higher rating than Vanguard from Consumer Reports, I'm wondering if I hear more about Vanguard because not everyone has access to USAA, or if there are some drawbacks to USAA. I'm a bit confused. If they aren't discount brokerages, what would be the reason anyone would invest with them instead of the discount brokerage firms? Thanks for any thoughts.

MDM

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Re: Discount Brokerages, Vangard and USAA
« Reply #1 on: January 15, 2015, 02:27:45 PM »
I'm thinking that investing with a discount brokerage is the direction I want to go, but I'm not clear which firms are discount brokerages. It doesn't seem like Vangard is, but I'm wondering why so many people on here invest with Vanguard if it is not a discount firm. Also, USAA Brokerages was given a higher rating than Vanguard from Consumer Reports, I'm wondering if I hear more about Vanguard because not everyone has access to USAA, or if there are some drawbacks to USAA. I'm a bit confused. If they aren't discount brokerages, what would be the reason anyone would invest with them instead of the discount brokerage firms? Thanks for any thoughts.

What is your definition of "discount brokerage"?

J'onn J'onzz

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Re: Discount Brokerages, Vangard and USAA
« Reply #2 on: January 15, 2015, 02:28:49 PM »
A discount brokerage is basically a brokerage with low commission rates, not sure if there is a certain amount to be under to be considered discount but I would say anything under $15 a trade. With that said the reason a lot of people like Vanguard is because of the low expense ratios on their mutual funds and ETFs. If you also use them as a broker then you do not pay any commissions when buying their products so even if they are considered a "discount" brokerage you are not paying them any commissions anyway if you only buy Vanguard funds.

I guess it depends on what kinds of things you are wanting to buy as to which broker you should choose.

curlycue

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Re: Discount Brokerages, Vangard and USAA
« Reply #3 on: January 15, 2015, 03:13:48 PM »
Thanks~ I need to transfer an IRA from an old job.

curlycue

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Re: Discount Brokerages, Vangard and USAA
« Reply #4 on: January 15, 2015, 03:18:42 PM »
It is a bit complicated for me. Back in the day when I opened my IRA I wanted a Roth but somehow with my employers matching plan I could only do a regular IRA. However, I heard that you can convert an IRA to a Roth IRA. So I need to rollover my money to a different company (that is what I am "shopping" for) and change the regular IRA to a Roth. Hope that clears things up a bit. Also, I've heard a lot of good things about Vangaurd, but USAA has higher ratings by Consumer Reports and I am a member so that is an option.

Kriegsspiel

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Re: Discount Brokerages, Vangard and USAA
« Reply #5 on: January 15, 2015, 03:58:53 PM »
IIRC, USAA charges $8.95 a trade, I haven't used Vanguard except for their mutual funds, but I think their commission is like, $3 less.

RapmasterD

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Re: Discount Brokerages, Vangard and USAA
« Reply #6 on: January 15, 2015, 04:04:25 PM »
A discount brokerage is basically a brokerage with low commission rates, not sure if there is a certain amount to be under to be considered discount but I would say anything under $15 a trade. With that said the reason a lot of people like Vanguard is because of the low expense ratios on their mutual funds and ETFs. If you also use them as a broker then you do not pay any commissions when buying their products so even if they are considered a "discount" brokerage you are not paying them any commissions anyway if you only buy Vanguard funds.

I guess it depends on what kinds of things you are wanting to buy as to which broker you should choose.

By this definition, Fidelity, TD Ameritrade, Vanguard all qualify as very good discount brokerages, or in the case of Fidelity and Vanguard, firms with very good discount brokerage services.

If you look at the Vanguard commission structure, you'll see they discourage frequent traders, and they also don't offer certain amenities, like the ability to set a trailing stop loss on a security, that Fidelity and TD do. For larger portfolios, Vanguard commissions are negligible to free.

innerscorecard

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Re: Discount Brokerages, Vangard and USAA
« Reply #7 on: January 15, 2015, 11:24:08 PM »
Bank of America charges no commissions if you have a modest amount of assets (the threshold is something really low like $50k). However, they have pretty poor execution so if you do a lot of trades, you'll be better off with Interactive Brokers.

Not only is the execution generally poor, but they also ban certain ETFs, such as GVAL. And they also charge a $30 fee for corporate actions (rights exercise, warrant exercise, etc.).

Still, it fulfills my needs for now...

innerscorecard

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Re: Discount Brokerages, Vangard and USAA
« Reply #8 on: January 16, 2015, 07:32:46 AM »
Merrill Edge also has zero access to international markets. Very annoying.
« Last Edit: January 16, 2015, 07:56:54 AM by innerscorecard »

Holyoak

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Re: Discount Brokerages, Vangard and USAA
« Reply #9 on: January 16, 2015, 07:56:20 AM »
Hi CC,

I have my stock portfolio with USAA, and now they seem to be doing a pretty good job...  Not the case years ago; the fees were high, dividend re-investments were done incorrectly, and executions a bit slow.  It makes it pretty convenient for me, since I have so many financial and insurance products with them since I was commissioned an officer back in 1989.

If rolling over an IRA, I would definitely call Vanguard, and have them walk you through the process.  I love VG, their professionalism, and ability to get things done easily...  Super low fees don't hurt either.  Best of luck to you.

Scandium

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Re: Discount Brokerages, Vangard and USAA
« Reply #10 on: January 16, 2015, 12:58:44 PM »
It is a bit complicated for me. Back in the day when I opened my IRA I wanted a Roth but somehow with my employers matching plan I could only do a regular IRA. However, I heard that you can convert an IRA to a Roth IRA. So I need to rollover my money to a different company (that is what I am "shopping" for) and change the regular IRA to a Roth. Hope that clears things up a bit. Also, I've heard a lot of good things about Vangaurd, but USAA has higher ratings by Consumer Reports and I am a member so that is an option.
Change your IRA to a roth I'm pretty sure  you'll pay taxes. Why do you need to do this? Why not keep both, one IRA and one roth?

curlycue

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Re: Discount Brokerages, Vangard and USAA
« Reply #11 on: January 16, 2015, 05:56:31 PM »
Right now I'm in the lowest tax bracket I'll probably ever be, it makes more sense to me to pay now than in the future when I'm in a higher bracket.