Target
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Summary
Longtime friends Peter Chang and Deborah Barry have decided to leave their current employer and to work for a company that specializes in broadband technology. Both will receive a lump sum of $75,000 that they must roll over into self-directed tax differed retirement accounts. Peter is 30, not married and holds a degree in Computer Science. He rents an apartment and is in no hurry to purchase a home. Deborah holds an MBA in finance, is married to a physician and hopes to start a family soon. Peter is leaning towards a bare-bones online broker with low cost per trades. Currently, they are offering free trades. Deborah is more of a blue chip stocks, mutual fund type of gal. Both decide to research a number of brokerage firms and investment advisors.
Questions/Answers
There are several brokerage firms for a person to chose from. I looked at four: Merril
Lynch, Smith Barney (Citigroup), Charles Schwab and E*Trade Financial. All of these
firms provide general investment services, asset management and all of them have
different costs assocaited and different investment requirements. Currently, Peter is
looking for an online investment firm. Based on this, I would recommend E*Trade to
him. They offer money market accounts, mutual funds, mortages and home equity loans.
Their prices range from $6.99 – $9.99 for stocks and options trades and $0.75 to $1.25
options contracts for an account that has a minimum of five trades a month. What they
call an “active trading” account. Their “E-Trade Complete” account charges $11.99 –
$14.99 for stocks, mutual funds, options, options, ETFs and advance cash management
compared to other brokerage firms. I think E*Trade is a good choice for Peter since his
main focus is “online trading.”