A conversation with a Charles Schwab associate about funding a ROTH IRA and their options for it. Part 2

In keeping with the flow of the conversation (Part one can be found here) – things have been a pretty good road so far on it. I like the speed at which the rep is getting back on my questions from Charles Schwab, and I’m about a day or 2 away from opening up the ROTH IRA through them and finding my OWN investments to use which DON’T include the “B” shares from Edward Jones.

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From: [Hank]
Sent: Wednesday, November 21, 2007 12:18 PM
To: [Charles Schwab guy]
Subject: RE: Charles Schwab

So then, to get my best bang for my ROTH buck, I need out of B shares it sounds. What if I stopped paying into the ROTH with Edward Jones and opened another ROTH account elsewhere that I could better allocate the funds while KEEPING this ROTH alive just for the 5 years so I wouldn’t get hit with the backend charge of taking it out – is that a good idea?
So I can open any type of account with Schwab then and be able to buy into the same funds/stocks I could from anywhere? Is it more expense? So if I open a secondary ROTH with you guys, I can invest in ANY fund out there? What’s the fee to do this?

Thanks for the quick response too – I LIVE on email, so it is super convenient! Thanks!

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From: [Charles Schwab guy]
Sent: Wednesday, November 21, 2007 11:30 AM
To: [Hank]
Subject: RE: Charles Schwab

You will not get hit with the back end fee until or unless you sell the funds. You may be able to transfer the funds into another account, but likely Edward Jones would charge you a transfer of account fee. So to save money, if they do not charge you an account maintenance fee, then it would make sense to leave it where it is.

Fees to invest in mutual funds vary, sometimes by fund. Mostly we suggest you buy a no-load, no transaction fee fund, which costs you nothing. Maximum mutual fund fees can be as high as $49.95, if you choose a fund that charges a fee.

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From: [Hank]
Sent: Monday, November 26, 2007 12:54 PM
To: [Charles Schwab guy]
Subject: RE: Charles Schwab

So there is no restriction as to what I can invest with a ROTH IRA from Schwab then? As long as it has a ticker symbol, I can get in?
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From: [Charles Schwab guy]
Sent: Monday, November 26, 2007 11:56 AM
To: [Hank]
Subject: RE: Charles Schwab

That is correct.

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From: [Hank]
Sent: Monday, November 26, 2007 2:27 PM
To: [Charles Schwab guy]
Subject: RE: Charles Schwab

Well that sounds like a plan to me – so how does Schwab make money off my ROTH then? No service fee or anything? I know YOU don’t make $ off me, as you get paid by them, but what do I owe them to open one up?
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From: [Charles Schwab guy]
Sent: Monday, November 26, 2007 2:12 PM
To: [Hank]
Subject: RE: Charles Schwab

Either by trading fees, if any, or we are paid out of the fund management fees.

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From: [Hank]
Sent: Monday, November 26, 2007 3:31 PM
To: [Charles Schwab guy]
Subject: RE: Charles Schwab

Sorry, can you be more specific on what trading fees are?
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From: [Charles Schwab guy]
Sent: Monday, November 26, 2007 2:34 PM
To: [Hank]
Subject: RE: Charles Schwab

Trading fees are what we charge to do the transactions, $12.95 for online stock trades, or up to $49.95 for mutual funds unless it is a no-fee fund.

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From: [Hank]
Sent: Monday, November 26, 2007 3:47 PM
To: [Charles Schwab guy]
Subject: RE: Charles Schwab

Is there an initial fee to set up the ROTH account?

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