I have been thinking about using Schwab as a supermarket for purchasing individual a few funds from different families. They have been very attentive, but I am wondering about the disadvantages of using the supermarkets. Just how do they make their money?

MaryBach queried:

I have been thinking about using Schwab as a supermarket for purchasing individual a few funds
from different families. They have been very attentive, but I am wondering about the disadvantages
of using the supermarkets. Just how do they make their money?

When I opened my Schwab account they told me that a lot of funds pay them the sales commission, or at least a finder's fee. The companies that don't, like Vanguard, Schwab charges you a fee for.

Hello,

I'd say forget about the disadvantage of the system of 'supermarkets' & concern yourself with the many disadvantages of mutual funds themselves.
I'm by far not the most experienced or educated (new)Fool out there but from what I've learned here, it's definitely worth the time to explore other possibilities like index funds (such as the S&P's,) & other individual stock strategies & whatever else more experienced Fools might suggest.

(Sorry, I just could not resist this due to the ton of stuff I've learned from Fools here these past few months after blindly being led to believe quite some years ago that the MF's I've had for years were the only type of investment vehicle available to anyone -'period'-.
In other words, if I seem negative & biased against them it's not only because they're not the most efficient investment vehicles, but also because the 'person' who some years ago exposed me to the world of investing never fully educated me -the ignorant uneducated mushroom that I was- on ALL types of investing options that existed, such as index funds, individual stocks, etc.) I wonder whose best interest was really at heart there.

Remember, 'ignorant' isn't a bad word. It just simply means not being educated & making decisions without all the facts.

I apologize if I came across in an impolite manner.
Charlie