There are many companies ready to sell you mutual funds, but due to a wide variety of fee structures, some companies are better suited to sell you mutual funds than others.

Let’s take a look at who wants to sell you mutual funds and what their motives and fees are:

Insurance Companies
Insurance companies are a dangerous place to buy mutual funds. They love using the words "mutual funds" because people trust mutual funds and it is a known product. The problem is that they prefer to sell loaded mutual funds and they like to wrap mutual funds into other products like variable annuities--often taking away the advantages that mutual funds offer (like liquidity and low fees).

Insurance salesmen are after the commissions they receive when selling funds, which is why you won’t find insurance salesmen selling no-load funds.

Banks
Banks are great places for some products, but not mutual funds. Banks, too, love selling funds of the loaded variety, but rarely offer much variety (only one or two fund families). They, too, receive commissions. Banks are also known for having very limited or incorrect information about the mutual funds they sell. A study by Consumer Reports concluded that the odds of getting good advice at the bank about funds was worse than one in six (the sales people weren’t even asking the right questions and often gave wildly wrong answers).

Stock Brokers and Investment Advisors
These two groups are a little trickier. Some want to sell you loaded funds for a commission, others collect fees for advice while selling no-load funds and the last group charges a percentage of assets under management. Generally these companies are good for advice, but if you are a do-it-yourselfer, the next two choices are much better for you.

Discount Stock Brokers
This is a great way to purchase mutual funds. Many discount brokers will offer access to hundreds or thousands of mutual funds at no cost (no transaction fee). Though you can buy mutual funds directly with the fund companies, some people prefer discount brokers because they help simplify bookkeeping and are more up on technology than some of the smaller fund companies.

Mutual Fund Companies
The best way to buy mutual funds is to go straight to the source. By investing directly with the mutual fund companies, you can do so without transaction costs. Fund companies have no hidden agendas – they exist to serve their customers, which happen to be owners or shareholders.