What to Look for When Choosing an Investment Company for an IRA


When an IRA is offered by your employer, there’s no need to choose an investment company. The company you work for will have already chosen one, and it will offer you a set variety of retirement account options. If you want to invest for retirement on your own, however, you’ll need to start by deciding which investment firm you want. Here’s what to look for when choosing an investment company for an IRA:

Level of Personal Attention

Investment companies take several forms, each one offering its own type and level of personal attention. Traditional brokerages tend to offer the most attention, and they’re willing to provide financial advice. This advice comes at extra cost, which takes away from profits but helps to ensure the attention of the adviser.

Hometown banks also offer plenty of personal attention and can set up an IRA. Their other investment options, however, are limited. Independent advisers are another high-touch option, but their fees can be so high that they negate much of the profit.

On the low-attention end, online brokerages take the lead but with much lower fees. Traditional brokerages will also step back on the attention level if their advisory services aren’t used. These options are good for investors who know exactly what they want and another’s input is less important to them.

Investment Choices

Each type of investment company offers a different level of choices. The biggest menus of options are found at brokerages. There, you can set up IRAs, buy stocks and bonds, buy mutual funds, and more. On the other side of the spectrum, there are hometown banks. Local banks tend to offer options such as IRAs, CDs, and old-fashioned passbook savings accounts.

Your Overall Financial Goals

This is one of the most important things to consider when looking for an investment company. If you just want an IRA – and don’t expect to ever want any other form of investment instrument – a basic provider will usually cover the necessary details. If your goal is to add other investment types later on, such as stocks, bonds, or mutual funds, then it’s better to go with a company that offers a wide variety of options. The other options can be accessed when the time comes.

Company Background and Expected Stability

No matter what an investment company offers, it will be for naught if the business folds or encounters other significant difficulties. Therefore, it’s important to research the firm’s background. Look for a good track record for its investment offerings as well as for the company itself. If an individual broker or adviser will be used, check his or her background as well.

Careful consideration and research are the keys to choosing the best company for any specific investment plan. There is no single right answer, so it’s important to take the time to choose the company that’ll be the best match.

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