You can also open your IRA through a brokerage company and invest your IRA funds using a brokerage DRIP. Many brokerage firms advertise free dividend reinvestment services for account holders. These plans are often known as “synthetic DRIPs.” We take a closer look at synthetic DRIPs in Chapter 10.
The big difference between a brokerage DRIP and a company-sponsored DRIP is that company DRIPs allow account holders to purchase additional shares at little or no commission. On the other hand, few brokers are willing to waive their commissions for account holders. They may be willing to reinvest dividends for you at no cost, but you’ll have to pay a commission if you want to buy more shares.
Another major disadvantage of synthetic ...