Most investors choose to work with some form of a financial adviser to take advantage of professional investment advice, retirement planning help, and simply to take some of the burden of investing off their shoulders. In this article we will talk about five of the top-rated full-service nationwide retirement investment companies and discuss their relative strengths.
First – let’s discuss what “full service” means. Full-service brokers typically offer a wide range of investment products, financial advice, research, tax advice, and investment account types. All this comes at a price, and commissions are typically higher than at discount brokerages. Full service brokers are best for investors who want one-stop investment help rather than separating investment advice from investment management.
Edward Jones consistently ranks highly in customer satisfaction surveys as well as in long-term investment performance and even employee satisfaction. It is an oddity in the investment world in that it is structured as a partnership and owned by its own financial advisers. Its motto has been “Main Street, Not Wall Street” for many years and you will find single-adviser offices in towns and cities across the country.
Edward Jones favors a “conservative,” long-term buy-and-hold investment strategy. You won’t find investments like derivatives or hedge funds among its offerings since the company believes strongly in blue-chip investments and typically recommends mutual fund investments from its portfolio of preferred fund families. Be aware that advisers are paid through commissions and higher loads on these preferred funds and make sure that they meet your needs and not just your adviser’s wallet.
Financial advisers are paid on commission for most clients but can also offer wrapped account fee-based plans for clients with large portfolios. Edward Jones is not exactly the most modern of investment companies. Financial advisers only recently were allowed to use email to converse with clients and prefer to conduct most business over the phone or during office visits. However, if a small-town personal relationship is what you want out of your adviser, Edward Jones might be the choice for you.
Although Vanguard only meets our full-service definition by a hair, we felt we had to include it as an example of the variety of investment styles out there. Vanguard is the grand poobah of low-cost index fund investing. Founded in 1975, Vanguard is based on the premise that most actively-managed funds do not beat the index so it is better to invest directly in the index. Vanguard is now the world’s largest no-load (no commission) mutual fund company, but it also offers a full range of load mutual funds, ETFs (exchange traded funds), IRAs, investment advice, and other financial planning services.
A recent study of internal investment ratios (annual expenses) of popular mutual funds showed that Vanguard was able to beat other firms 70% of the time, demonstrating that it is truly the king of low-cost index investing. Investors seeking low-cost index funds, no-load mutual funds, and other passiveinvestment types would do well at Vanguard, however those preferring more of the full-service, actively-managed experience would do better elsewhere. Vanguard charges no fees for trading their own ETFs, index funds, and mutual funds; however commissions are pretty steep for non-Vanguard funds.
In keeping with its low-cost model, Vanguard has few offices and encourages clients to do as much online as possible. However, those needing to take advantage of its full-service offerings can speak to a financial adviser over the phone.
Fidelity is the US’s largest mutual fund company, and with over $1 trillion under management is one of the largest retirement investment companies in the world. Fidelity is an excellent choice if mutual funds are your preferred investment product. As a company, it consistently ranks highly for its investment products and its online account access. It was ranked as 2011’s best online broker by Kiplinger.
Most Fidelity clients work with brokers over the phone or manage their investments online. However, Fidelity has many offices across the US for those preferring an in-person visit. Among the benefits of Fidelity’s excellent phone system is that clients can contact a broker at any time, even after hours, with questions and trades.
Fidelity’s broad range of mutual fund offerings is its biggest strength. Although its products lost a great deal of value along with the rest of the market in recent years, company president Ned Johnson was praised by the Wall Street Journal for guiding the company through the recent troubled economy. It offers mutual funds for literally every possible category: international, sectors, small cap, large cap, high-growth, ethical, developing economies, etc. If mutual funds are your thing, Fidelity is your place. Since Fidelity funds are in-house moving money between funds is usually commission-free and Fidelity funds have low average expense rations.
A strike against Fidelity goes for its high commissions on non-Fidelity funds, so consider keeping your outside investments elsewhere.
RBC Wealth Management
RBC (formerly RBC-Dexia) won JD Power’s 2011 award for Best Full Service Retirement Company. Clients ranked it highly across the board, with particular emphasis on relationships with financial advisers and online account access. RBC is a standard full-service broker, offering a wide range of investment advising services, analysis and research, and investment products.
RBC advisers favor mutual funds and blue chip investments; however they have brokers specializing in a wide range of investment styles, including aggressive, high-growth investments, buy-and-hold, and services for high-net-worth investors.
Charles Schwab has made a name for itself for its network of 300+ investment offices across the country and good relationships with clients. Clients have fast access to brokers and a full range of stocks, options, mutual funds, and other investment products. Consistently ranked highly for customer service, retirement product offerings, and fees, it came in second in JD Powers’ 2011 ranking of full-service brokers.
Schwab also offers discounted online trading and excellent third-party investment research tools, meaning clients can mix and match investment services. Clients seeking full-service investment advice can book appointments in the local Charles Schwab office, develop a plan with the assistance of a financial adviser and move online to implement, taking advantage of the lower fees.
Don't Put It Off, Jumpstart Your Retirement Plan Today
A comfortable retirement can only be secured with prudent planning, aggressive saving, and disciplined investing. Online research is a good start, but consider the benefits of discussing your options with a qualified financial advisor. The alternative could mean lost opportunities, higher fees, and lack of discipline. Request a free, no-obligation consultation today.Speak with an advisor over the phone about your retirement plan for FREE.