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I have recently considered changing my traditional IRA (that has only about 12 mutual/bond fund options) to a brokerage held IRA [that allows me to invest directly in stocks (shares of companies listed) on the NYSE, AMEX, NASDAQ and probably other exchanges in years to come]. It is my impression that this option is sometimes called a “self-directing” IRA, because as the owner, I can make per share purchases and choose from the universe of corporations that offer publicly traded shares on the three exchanges listed above. I can also purchase shares in mutual funds or ETF-type funds, if I so choose.

Is this type of account typically called a “Self-directing IRA” or is that expression ALSO one which is often applied to traditional IRA (which limits your options to shares in approximately 12-65 mutual/bond funds). If they are both considered self-directing, what is a better way to explain this distinction, to someone who might later assist me, such as a financial adviser or financial institution? Once this is done, I would eventually like to explain this unique type of account to my beneficiaries and help them understand how to invest properly so they will feel more confident about investing the money themselves someday.

Do any of you have good experiences with an IRA through a brokerage-type account? Any tips on who to stay away from (excessive fees, intimidation, unavailable and such)?

Thanks in advance.

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