C share class load funds for an IRA?

Is it ever wise to choose load funds over no-load funds? My husband and I met with a new financial advisor who recommended two funds for a Roth IRA for each of us: Waddell and Reed WCASX and John Hancock JHLVX. Both of these funds seemed to have performed well and have a high rating, but the more I read, the more it seems that we should stay away from load funds. Also, he is recommending C class shares of both funds. Would A or B class shares be a better choice? Does he make more with C class shares?

I understand that the advisor won't recommend no-load funds because he needs to make a commission but would we be better off going on our own and investing in a Fidelity or T. Rowe index fund or TDRF? I'd like to establish a relationship with a financial professional so that we can get advice on other investments and such, but don't want to pay any unnecessary expenses either. Can anyone offer any advice? I am 31, my husband is 28 and this would be the first time we've contributed to an IRA though we both put 10% in our 401k. Thanks for your help!

IMO, load funds should usually be avoided unless you need--and are getting--competent advice from an adviser. Even then, if you need advice, I'd recommend talking to a FEE-ONLY adviser over, say, the salesman at a full-service brokerage, for example.

If you MUST go with load funds, you don't want to go with C shares for a Roth. They're typically the most expensive long-term, because the load is charged each and every year until the end of time...if not longer. For long-term investors, the A shares are usually the best choice because the load is paid right off the bat and then you're done with it (eh, until you purchase more shares).

But I think you have the right idea. Learn the basics of investing, open an account with a discount brokerage, and choose for yourself a diversified mix of good no-load funds. An alternative to mutual funds would be exchange-traded funds (ETFs). Over time, ETFs and index funds tend to outperform most actively-managed mutual funds, one reason being lower expenses.

Sounds like the agent wants to line his pockets. Class A would be the best deal for you. Unless.......... you are switching fund companies on a regular basis.

You are at the same age and starting point as my wife and I. We were also sold C shares.

That was 6 months ago and I have been looking for the right answer ever since.

My current understanding...... (please people correct me where I'm wrong)
2 Ways to invest in Mutual Funds
1.Do it yourself
2.Pay a professional

Many do it yourself investors just aren't cut out for it. Whether you're jumping in and out of funds, lose interest to reallocate every year , whatever its just risky unless you thoroughly enjoy managing your investments and have great discipline and fortitude to stay prudent.

When you pay a pro you have do just that, pay a pro. There are two type of pros. They each have pros and cons
1. Fee Only. Charges a hourly fee and just advises.
2. Commission based
With the commission based guy is where the share class comes into play.
A is the cheapest way to pay a commission based pro when you go long term. The more money your account grows to the cheaper the front end load gets. All the way to C which typically is 1% of your total account assets is kicked back to the adviser.

TOP 3 fund families
1 Vanguard <---- DIY, no loads and lo fees but you only get the market as far as returns go.

2.Fidelity <-----No loads and loads, kind of a weird company but they have local branches.

3. American Funds <----- Class shares sold by exclusive Brokers. Very great track record over a very long term. Historically you get better than the market but this is where the arguments come in about paying the loads.

Like I said before I was where you were 6 months ago and this is what I have learned since by reading books, browising forums and listening to money podcasts.

As I mentioned before I am not a pro or educated in the investing business, just a motivated self learner. I want to make the right decisions for me and my family. So people please correct me where I am wrong so I can have a better understanding of how investing business works.
:)

C-funds can typically be viewed as an Assets Under Management (AUM) arrangement. There is no load up front, but the advisor is paid annually based on the assets they are managing. It could be viewed exactly the same as a full service brokerage account.

As an aside, American funds are unusual in their cost structure because they are one of the very few fund families that convert C-shares into a share similar to a A-share after 10 years (F-shares). In other words, the additional annual expense of the C-shares are not a permanent condition like other fund families.

Plain Talk on investing by Vanguard, Can be listened to via podcast on iTunes just released a show regarding indexing vs active managed funds. Go listen its quick. Be aware they are slightly Bias regarding indexing.

Brian Preston released another podcast today that focuses on this very topic.
http://www.money-guy.com/