Load-Fund Discounter Hits a Snag
Readers who went to www.investforless.com after reading our write-up of the site (Now You Can Buy Load Funds Commission-Free) were likely disappointed by what they found.
Readers who went to www.investforless.com after reading our write-up of the site (Now You Can Buy Load Funds Commission-Free) were likely disappointed by what they found. The site had to stop opening new accounts temporarily after Scottrade unexpectedly terminated its relationship as custodian. Scottrade says no InvestForLess accounts had been opened with it, suggesting that no investors were stuck in no man's land when the brokerage firm pulled the plug on the relationship.
This was the second such setback for InvestForLess, which hasn't exactly endeared itself to the brokerage and mutual fund industries with its controversial business model. InvestForLess is structured as a registered investment adviser but opts to forgo commissions on load funds, allowing it to offer those funds to its clients commission-free.InvestForLess has signed a new custodian, a broker-dealer called Trade PMR, and its site should soon be up and running again. Still, you may want to wait a few months before opening an account to make sure that InvestForLess doesn't run into any more roadblocks. You wouldn't lose your money if the site changed custodians again, but who needs the extra headache?