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I'm in the process of helping my 18 yr old son invest some money in a Roth IRA and I'm not sure what to recommend to him in terms of a broker. Most of the money I manage is at Vanguard in one form or another. His IRA will be less than $5K and Vanguard charges an annual fee until it's over $5K. I have Coverdell accounts at TDWaterhouse and have been fine with them but those accounts have had very little activity(we could contribute and then we couldn't and now we can again - at least for his younger brother.) so I'm not sure I have a good level of activity on which to judge service.

He tends to contribute in lump sums when he feels comfortable with what's in his savings account - this particular instance is $1K. He's really a good money manager so I have no need to try to shape any of that.(Or more likely all the shpaing I can do has already occurred.) He's also a low-risk kind of guy.

Thoughts ?

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Hi, rad--

I think he can start a Roth over at (I'm assuming he has earned income.) I don't think that you have to be a teacher to deal with them, and I don't think they have those pesky low-balance fees.

Always a good idea to check it out with them though....

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I have been happy with my service through TD Waterhouse (I have an IRA and a regular brokerage account there). I would have no problem recommending them for IRA accounts with a low balance. Of course, my IRA account is soon to creep over $10,000 so I am transferring it to Vangaurd to take advantage of the better fee schedule. I decided to wait until I would get it over $10,000 to avoid the index fund fee for balances below $10,000...but looking back I should have just made the transfer when I got over $5000.

Good luck...and congrats on doing a good job of raising your kids to understand the power of compounding and staying out of debt!

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I agree with SirTas about TIAA-CREF. They have an index fund there that tracks the Russell 3000 called TCEIX (Equity Index). I have a roth there and am very happy with the service.

The other option is to have him open a ROTH at Scottrade ( ). There he could invest into something like VTSMX with as little as $1000 and incur none of the low balance or maintenance fees that he would incur directly at Vanguard, and no transaction fees that he would incur at any other brokerage. The only stipulation is that if you sell a fund within 90 days of buying it, you will be charged $17.50. I'm ok with that.

Good Luck
(Who has Roths at both TIAA and Scottrade and is happy with both.)
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First off, Great job on teaching your kids financial responsibility! I am 20 and I have a Roth at Scottrade, and I have been very happy with it. They have local offices that your son could take advantage of if he needs some help...depending on where you live. I am happy with my Scottrade Roth for various reasons.

-Local offices if help is needed
-Only 500 minimum to open Roth
-Easy website
-No fees or transaction costs for funds in a roth
-Low market orders of 7 dollars on individual equities
-Vanguard fee for low fund amount is not issued
-Wide variety of funds...all of which are fee free

Hope this helps! Once again, good job on teaching your kids about financial issues. Keep us posted on what you or he decides. Best of luck.

Have a good one!
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If he is interested in self-managing his retirement, then consider Scottrade. No maintenance fees and no fee for mutual fund transactions. He also has access to a world of funds.

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