What should I consider when selecting a broker/advisor to manage my IRA?
"This is not a direct answer to your question, but you might want to consider whether you want to have a financial planner at all. Would a large mutual fund company or brokerage serve your needs better than a bank? You are still quite young and so have been contributing to IRAs for only a few years. Also, the wording in your question suggests that your IRA investments have not done spectacularly well, and so it is reasonable to infer that your IRA is not a large amount, or at least not as large as what it would be 30  years from now. At this level of investment, it would be difficult for you to find a financial planner who spends all that much time looking after your interests. That you should get away from your current planner, presumably a mid-level employee in what is typically called the trust division of the bank, is a given.  But, to go to another bank (or even to a different employee in the same bank), where  you will also likely be nudged towards investing your IRA in CDs, annuities, and a few mutual funds with substantial sales charges and  substantial annual expense fees, might just take you from the frying pan into the fire. You might want to consider transferring your IRA to a large mutual fund company and investing it in something simple  like one of their low-cost (meaning small annual expense ratio) index funds. The Couch Potato portfolio suggests equal amounts invested in a no-load S&P 500 Index fund and a no-load Bond Index fund, or a 75%-25% split favoring the stock index fund (in view of your age and the fact that the IRA should be a long-term investment).  But the point is,  you can open an IRA account, have the money transferred from your IRA account with the bank, and make the investments on-line all by yourself instead of having a financial advisor do it on your behalf and charge you a fee for doing so (not to mention possibly screwing it up.) You can set up Automated Investment too; the mutual fund company will gladly withdraw money from your checking account and invest it in whatever fund(s) you choose.  All this is not complicated at all.  If you would like to follow the Couch Potato strategy and rebalance your portfolio once a year, you can do it  by yourself too. If you want to invest in funds other than the S&P 500 Index fund, etc. most mutual fund  companies offer a ""portfolio analysis"" and advice for a fee (and the fee is usually waived when the assets increase above certain levels - varies from company to company).  You could thus have a portfolio analysis done each year, and hopefully it will be free after a few more years.  Indeed, at that level, you also typically get one person assigned as your advisor, just as you have with a bank. Once you get the recommendations, you can choose to follow them  or not, but you have control over how and where your IRA assets are invested.  Over the years, as your IRA assets grow, you can branch out into  investments other than ""staid"" index funds, but right now, having a financial planner for your IRA might not be worth it. Later, when you have more assets, by all means if you want to explore investing in specific stocks with a brokerage instead of sticking to mutual funds only but this might also mean phone calls urging you to sell Stock A right now, or buy hot Stock B today etc. So, one way of improving your interactions and have a better experience with your new financial planner is to not have a planner at all for a few years and do some of the work yourself." I've not gotten an answer so far. Since I've started my search for a new financial planner here are the criteria I am using:
A broker does not have to allow the full trading suite the regulations permit.  From brokersXpress: Do you allow equity and index options trading in brokersXpress IRAs?     Yes, we allow trading of equity and index options in IRAs based on the trading level assigned to an investor. Trading in IRAs includes call buying, put buying, cash-secured put writing, spreads, and covered calls.  I understand OptionsXpress.com offers the same level of trading. Disclosure - I have a Schwab account and am limited in what's permitted just as your broker does. The trade you want is no more risky that a limit (buy) order, only someone is paying you to extend that order for a fixed time. The real answer is to ask the broker. If you really want that level of trading, you might want to change to one that permits it. I haven't seen anyone mention tax considerations and that's why I'm answering this. The rest of my answer is probably covered in the aggregate of other responses. Here's how I would look at this in a taxable (not an IRA) account: This could be an opportunity to harvest the tax losses to offset taxable gains this year or in future years. Unless I have compelling reasons to believe that the price will recover by at least (Loss% x ApplicableTaxRate) in the next 31 days then I would take the known - IRS tables - opportunities over the unknown. Here's what I would consider for all accounts: Is this the most likely place to earn a good return on my money and is it contributing to a strategy that fits my risk tolerance? You might need to get some emotional distance from the pain to make this determination objectively. As you consider your trading and investment strategy going forward consider that when it hurts and you have to pull yourself up by the bootstraps to think clearly about your situation, you were most likely trading with too much size for you in that particular position. I'm willing to make exceptions to that rule of thumb, but it's a good way to use the painful losses as a gut check on how your strategy fits your real situation. P.S. All traders experience individual losses that hurt and find their way to the most suitable strategies for them through these painful experiences. "Couple of clarifications to start off: Index funds and ETF's are essentially the same investments.  ETF's allow you to trade during the day but also make you reinvest your dividends manually instead of doing it for you.  Compare VTI and VTSAX, for example.  Basically the same returns with very slight differences in how they are run.  Because they are so similar it doesn't matter which you choose. Either index funds and ETF's can be purchased through a regular taxable brokerage account or through an IRA or Roth IRA.  The decision of what fund to use and whether to use a brokerage or IRA are separate. Whole market index funds will get you exposure to US equity but consider also diversifying into international equity, bonds, real estate (REITS), and emerging markets.  Any broker can give you advice on that score or you can get free advice from, for example, Future Advisor.  Now the advice: For most people in your situation, you current tax rate is currently very low.  This makes a Roth IRA a very reasonable idea.  You can contribute $5,500 for 2015 if you do it before April 15 and you can contribute $5,500 for 2016.  Repeat each year.  You won't be able to get all your money into a Roth, but anything you can do now will save you money on taxes in the long run.  You put after-tax money in a Roth IRA and then you don't pay taxes on it or the gains when you take it out. You can use Roth IRA funds for college, for a first home, or for retirement. A traditional IRA is not recommended in your case.  That would save you money on taxes this year, when presumably your taxes are already low. Since you won't be able to put all your money in the IRA, you can put the rest in a regular taxable brokerage account (if you don't just want to put it in a savings account).  You can buy the same types of things as you have in your IRA.   Note that if your stocks (in your regular brokerage account) go up over the course of a year and your income is low enough to be in the 10 or 15% tax bracket and you have held the stock for at least a year, you should sell before the end of the year to lock in your gains and pay taxes on them at the capital gains rate of 0%. This will prevent you from paying a higher rate on those gains later.  Conversely, if you lose money in a year, don't sell. You can sell and lock in losses during years when your taxes are high (presumably, after college) to reduce your tax burden in those years (this is called ""tax loss harvesting""). Sounds like crazy contortions but the name of the game is (legally) avoiding taxes.  This is at least as important to your overall wealth as the decision of which funds to buy. Ok now the financial advisor.  It's up to you.  You can make your own financial decisions and save the money but it requires you putting in the effort to be educated.  For many of us, this education is fun.  Also consider that if you use a regular broker, like Fidelity, you can call up and they have people who (for free) will give you advice very similar to what you will get from the advisor you referred to.  High priced financial advisors make more sense when you have a lot of money and complicated finances.  Based on your question, you don't strike me as having those.  To me, 1% sounds like a lot to pay for a simple situation like yours." "There are several types of financial advisors. Some are associated with brokerages and insurance companies and the like. Their services are often free. On the other hand, the advice they give you will generally be strongly biased toward their own company's products, and may be biased toward their own profits rather than your gains. (Remember, anything free is being paid for by someone, and if you don't know who it's generally going to be you.) There are some who are good, but I couldn't give you any advice on finding them. Others are not associated with any of the above, and serve entirely as experts who can suggest ways of distributing your money based on your own needs versus resources versus risk-tolerance, without any affiliation to any particular company.  Consulting these folks does cost you (or, if it's offered as a benefit, your employer) some money, but their fiduciary responsibility is clearly to you rather than to someone else. They aren't likely to suggest you try anything very sexy, but when it comes to your primary long-term savings ""exciting"" is usually not a good thing. The folks I spoke to were of the latter type. They looked at my savings and my plans, talked to me about my risk tolerance and my goals, picked a fairly ""standard"" strategy from their files, ran simulations against it to sanity-check it, and gave me a suggested mix of low-overhead index fund types that takes almost zero effort to maintain (rebalance occasionally between funds), has acceptable levels of risk, and (I admit I've been lucky) has been delivering more than acceptable returns. Nothing exciting, but even though I'm relatively risk-tolerant I'd say excitement is the last thing I need in my long-term savings. I should actually talk to them again some time soon to sanity-check a few things; they can also offer advice on other financial decisions (whether/when I might want to talk to charities about gift annuity plans, whether Roth versus traditional 401(k) makes any difference at all at this point in my career, and so on)." "There are a lot of unintended consequences of fairly arbitrary IRS guidelines when it comes to 401Ks, they both close and create tons of loopholes and many companies are left to implement their own policy around these laws. Ultimately what you are left with are a lot of random things, interpreted differently by every single company in the country, that aren't directly codified by the IRS or Congress. If you have a choice regarding what brokerage firm manages your 401(k), then just call around. Be sure to ask the pencil pusher on the phone to double check because they might say ""OF COURSE you can get paperless statements it is 2015"" but then when you sign up it becomes ""ooohhh sorry due to recent guidelines this kind of account isn't eligible for paperless statements""" I don't quite understand your thought process here.  First, in a tax-advantaged retirement account you are NOT allowed to engage in a transaction with yourself.   If you just want to run a business and be able to write off expenses, how is using the self-directed IRA relevant? You can either buy the condo using your tax-advantaged account and rent it out to regular tenants.  Or you buy the condo yourself using your own money and then operate your business so you can deduct business expenses from doing so.  401k's allow you to take a loan out of it, so you can look into that as well. "I have a similar situation -- five different accounts between me and my wife. Just as you and @Alex B describe, I maintain my asset allocation across the combination of all accounts. I also maintain a spreadsheet to track the targets, deviations from the targets, amounts required to get back in balance, and overall performance. I (mostly) don't use mutual funds. I have selected, for each category, 1 or 2 ETFs. Choosing index ETFs with low expense ratios and a brokerage with cheap or free trades keeps expenses low. (My broker offers free ETF trades if you buy off their list as long as you aren't short-term trading; this is great for rebalancing for free 2 or 3 times a year.) Using ETFs also solves the minimum balance problem -- but watch out for commissions. If you pay $10 to buy $500 worth of an ETF, that's an immediate 2% loss; trade a couple of times a year and that ETF has to gain 5% just to break even. One issue that comes up is managing cash and avoiding transaction fees. Say your IRA has all the growth stock funds and your Roth has the bonds. Stocks do well and bonds do poorly, so you sell off some stocks, which creates a bunch of cash in your IRA. Now you want to buy some bonds but you don't have enough cash in your Roth, so you buy the bonds in your IRA. Not a problem at first but if you don't manage it you can end up with small amounts of various funds spread across all of your accounts. If you're not careful you can end up paying two commissions (in two different accounts) to sell off / purchase enough of a category to get back to your targets. Another problem I had is that only one account (401k) is receiving deposits on a regular basis, and that's all going into an S&P 500 index fund. This makes it so that my allocation is off by a fair amount every quarter or so -- too much in large cap equities, not enough of everything else. My solution to this going forward is to ""over-rebalance"" a couple of times a year: sell enough SPY from my other accounts so that I'm under-allocated in large caps by the amount I expect to add to my 401k over the next 3 months. (So that in six months at my next rebalancing I'm only 3 months over-allocated to large caps -- plus or minus whatever gains/losses there are.)" "Whoa. These things are on two dimensions.  It's like burger and fries, you can also have chicken sandwich and fries, or burger and onion rings.   You can invest in an taxable brokerage account and/or an IRA.  And then, within each of those...  You can buy index funds and/or anything else. All 4 combinations are possible.  If someone says otherwise, take your money and run.  They are a shady financial ""advisor"" who is ripping you off by steering you only into products where they get a commission. Those products are more expensive because the commission comes out of your end.  Not to mention any names.  E.J.    If you want financial advice that is honest, find a financial advisor who you pay for his advice, and who doesn't sell products at all.  Or, just ask here.  But I would start by listening to Suze Orman, Dave Ramsey, whomever you prefer.  And read John Bogle's book.   They can tell you all about the difference between money market, bonds, stocks, managed mutual funds (ripoff!) and index funds. IRA accounts, Roth IRA accounts and taxable accounts are all brokerage accounts.  Within them, you can buy any security you want, including index funds.  The difference is taxation.  Suppose you earn $1000 and choose to invest it however  Later you withdraw it and it has grown to $3000.  Investing in a taxable account, you pay normal income tax on the $1000. When you later withdraw the $3000, you pay a tax on $2000 of income.  If you invested more than a year, it is taxed at a much lower ""capital gains"" tax rate.  With a traditional IRA account, you pay zero taxes on the initial $1000.  Later, when you take the money out, you pay normal income tax on the full $3000.  If you withdrew it before age 59-1/2, you also pay a 10% penalty ($300).  With a Roth IRA account, you pay normal income tax on the $1000.  When you withdraw the $3000 later, you pay NOTHING in taxes.  Provided you followed the rules.   You can invest in almost anything inside these accounts: Money market funds. Terrible return.  You won't keep up with the market.  Bonds.  Low return but usually quite safe.  Individual stocks.  Good luck.   Managed mutual funds.  You're paying some genius stock picker to select high performing stocks. He has a huge staff of researchers and  good social connections.  He also charges you 1.5% per year overhead as an ""expense ratio"", which is a total loss to you.  The fact is, he can usually pick stocks better than a monkey throwing darts.  But he's not 1.5% better!  Index funds.  These just shrug and buy every stock on the market.  There's no huge staff or genius manager, just some intern making small adjustments every week.  As such, the expense ratio is extremely small, like 0.1%.    If any of these investments pay dividends, you must pay taxes on them when they're issued, if you're not in an IRA account.  This problem gets fixed in ETF's.  Index ETF's.  These are index funds packaged to behave like stocks.  Dividends increase your stock's value instead of being paid out to you, which simplifies your taxes.  If you buy index funds outside of an IRA, use these.  Too many other options to get into here." You are suggesting something called dollar cost averaging (or its cousin, dollar value averaging) - http://www.investopedia.com/articles/stocks/07/dcavsva.asp  This is certainly a valid investment strategy, although personally, I feel that for long term investment, it is not necessary unless you plan on being an active trader. I still strongly encourage you to research these two methods and see if they would work well for your personal investment strategy and goals. As far as what sorts of investments for a taxable account, I have three general recommendations: As far as which company to use for your brokerage, I personally have accounts at Voya, TRowe Price and Fidelity. I would strongly recommend Fidelity out of those three, mostly due to customer service and quality and ease of use of their website. Vanguard is a great brokerage, but you don't have to choose them just because you plan to mostly invest in Vanguard funds. I also recommend you research how capital gains and dividend taxing works (and things like lost harvesting), so that you can structure your investments with taxes in mind. Do this ahead of time, don't wait until April of 2016 because it will be too late to save on taxes by then. Too little information to give any kind of advice. What is your age, goals, other monies, other investments etc... You need to look at the whole thing. Are you investing already in tax-deferred IRA. Spend the time to learn to be your own investment advisor. Many investment professionals may disagree with me on this, but since you can't trust many of them better you do your own research first. Same with Stocks or ETF, you try to be the expert. Better you have the time to follow your own investments ideas, do not depend on a human or robot to tell you when to buy or sell. Their job is to part you from your money. If you do not have the time to this yourself, save yourself the money, and just do something else with it. I have been investing in the Stock Market since 1986, I have made more money than I lost. Good runs and bad. Today it is all about trading, you can not trust the financials given by anyone, or know what is going to happen in the markets in general. So unless you want to play the game every day, don't be in it. Nice idea. When I started my IRAs, I considered this as well, and the answer from the broker was that this was not permitted. And, aside from transfers from other IRAs or retirement accounts, you can't 'deposit' shares to the IRA, only cash. Anytime you invest in stocks, you do that inside an investment account - such as the type you might open at ETrade, Vanguard, Fidelity or Charles Schwab.   Once you have the account and fund it, you can tell the system to invest some/all of your money in  When you open your investment account, their first question will be whether this is a cash account, traditional IRA, or Roth IRA.  The broker must report this to the IRS because the tax treatment is very different. I'm in a similar situation as I have a consulting business in addition to my regular IT job.  I called the company who has my IRA to ask about setting up the Individual 401k and also mentioned that I contribute to my employer's 401k plan. The rep was glad I brought this up because he said the IRS has a limit on how much you can contribute to BOTH plans. For me it would be $24K max (myAge >= 50; If you are younger than 50, then the limit might be lower). He said the IRS penalties can be steep if you exceed the limit. I don't know if this is an issue for you, but it's something you need to consider. Be sure to ask your brokerage firm before you start the process. Maxing out an IRA would probably be step 1, if you exceed that probably just aim for saving in a taxable brokerage account. Just try and stick to ETFs if you're gonna index since they're slightly more tax efficient than a mutual fund The nature of this question (finding a financial adviser) can make it a conundrum. Those who have little financial experience are often in the greatest need of a financial adviser and at the same time are the least qualified to select one. I'm not putting you or anyone in particular in this category. And of course it's a sliding scale: In general the more capable you are of running your own finances the more prepared you are to answer this question. With that said, I would recommend backing up half a step. Consider advisers other than strictly fee-only advisers. Perhaps you have already considered this decision. But perhaps others reading this have not. My (Ameriprise) adviser charges a monthly (~$50) fee, but also gets percentage-based portions of certain investments. Based on a $150/hr rate that amounts to four hours per year. Does he spend four hours per year on my account? Well so far he does (~2 yrs). But that is determined primarily by how much interaction I choose to have with him. (I suppose I could spend more time asking him questions and less time on this forum. :P) I have never fully understood the gravitation towards fee-based advisers on principle. I guess the theory is they are not making biased decisions about your investments because they don't have as much of a stake in how well your investments to do. I don't necessarily see that as an advantage. It seems they would have less of an incentive to ensure the growth of your investments. Although if you're nearing retirement then growth isn't your biggest concern. Perhaps a fee-based adviser makes more sense in that scenario. Whatever pay structure your adviser uses, it would seem to make sense to consider a successful adviser with a good client base. This implies that the adviser knows what he/she is doing. (But it could also just be a sign that they are good at marketing themselves.) If your adviser has a good base of wealthy clients then choosing a strictly-fee based adviser would mitigate the risk of your adviser having less incentive to consider your portfolio vs that of more wealthy clients. To more directly answer your question I suggest asking several of your adviser candidates for advice on choosing an adviser. I suspect you will get some good advice as well as good insight on the integrity and honesty of the adviser.