The answer is quite simple because one of the options you mentioned, that is using a discount brokerage firm most likely has everything to offer you that a mutual fund has, but even more. So if you open your account at a discount brokerage firm, you can still buy Mutual Funds, but you will be able to pick from a much longer list of mutual funds, you can even get most mutual funds and pay less commissions than you would if you went to a single "family" of Mutual Fund company. At the brokerage firm you may be able to switch fund families periodically for no fee, where many single family mutual fund companies only allow you to switch to another fund in their family, but they will charge you either a fee or penalty for withdrawing your money out of their family to then take your money somewhere else to go into another fund in another family.
In addition, at a discount brokerage firm you will also find that you can invest in many more investment products than if you went to a mutual fund company. This means that you will be able to diversify your investments more easily at the brokerage company too. In addition, I recommend that you choose a discount brokerage firm that has an office with people to help you with just about all the help you will need to get and fill out paperwork, make switches between investments and also speak to investment advisors for help thinking about all your alternatives. Of course, if the brokerage firm is close by, you can easily stop at their office to either make quick deposits or withdrawals to and from your account, rather than having to rely on using the snail mail.
I hope this answer has been helpful to you. Good Luck with your investing.
Herbie Glass, MBA, Certified Pension Consultant Glass retirement Strategies, Inc. Bingham Farms, Michigan Www.glassretirement.com
I agree with all the answers, but would like to add my two cents. You should definitely go with a discount brokerage firm, as it offers you the flexibility to pick and chose any Mutual Fund and/or Exchange Traded Product to build a low-cost and diversified portfolio. You always want the ability to assemble a "best-of-breed" investment portfolio, as opposed to being in a closed architecture, which is what you will get with a Mutual Fund company.
I would recommend going with a discount brokerage firm like TD Ameritrade or Schwab for the simple reason that you will have access to a greater number of mutual funds from numerous fund companies, including the one(s) you might consider going with directly. If you are an inexperienced investor, I would recommend consulting with a financial advisor to help you select the most appropriate fund(s) for your needs, objectives, risk tolerance, time horizon, etc.
Hi Jenny - No doubt, go with a discount brokerage firm. In addition to Schwab and TD Ameritrade, Scottrade is a reputable firm worth checking out. Take care - Marcus
Discount brokerage will give you vastly more options to invest in.
The only advantage you might find with a single mutual fund company is that the website layout may be more user friendly as far as simplicity and tools to allocate into a specific fund. But you have a very finite group of funds the tools will work with