When you are purchasing an investment, there are a few different layers at play. Generally speaking there is the custodian, account type, and investment product.
Custodian - This is the financial institution where the money is located. A few examples of a custodian are TD Ameritrade, Fidelity, and Schwab. There are many different characteristics that distinguish one custodian from another. For example, fees, level of service, technology, account types, and investment products available.
Account Type - This is the account you open with the custodian. It is possible to have many different accounts types at the same custodian. For example, Traditional IRA, Roth IRA, SEP IRA, etc. Account types can vary in the investment options available, fees, contribution limits, and namely how they are treated from a tax perspective.
Investment Product - This is what is purchased in the account type. For example, you may be able to purchase a certain stock, mutual fund, ETF, etc. Generally speaking, it is the investment product that actually drives the investment return.
I have written on this before but wanted to highlight it again as it is confusing and I receive questions that relate to this in some way. I hope the above adds some clarity but don’t hesitate to reach out if you have any questions.
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