Choosing a Broker for your Investments

Choosing a broker is a challenging task that requires an understanding of your financial needs and research to determine the best level of service for you.

Choosing the right brokerage firm for your investment needs requires a significant amount of homework.  The first step in completing that homework should be asking yourself questions about your finances, knowledge, needs, and investment plan. Putting the answers to the following questions in writing will give you a clearer picture of your needs.

How much money do you have to invest?  What is your level of knowledge in stock investing?  How frequently do you trade?  Do you prefer value stocks, growth stocks or a combination? What goals are you hoping to accomplish by investing?  Are you looking for a full range or mid-level range financial services, or nothing more than someone who will place orders for you?

Once you answer those questions, it will be time to determine which kind of brokerage firm fits your needs.   If you're to choose stock brokerage with full-services firm, talk with the account executive who will handle your account and make sure he is someone with whom you're comfortable with and have faith in. Larger firms may be willing to transfer your account to a different account executive if you like the firm but not your stock broker.

For full-service and discount firms, research as many different firms as possible to see what each one offers. Make a list of every type of service available, rate each type in order of importance to you, and eliminate any firm that doesn't score well on those services that you consider important.

For both discount and online firms, they have websites and customer service lines as trial run. Rate each firm on how well their site is designed, how easy it is to use, and any other differences you discover. Note any signs that customer service lines are not run well.

You may start out looking for an online broker because of the high fees you have been paying to a traditional broker. Or, since you want to control what is purchased and sold in your account, you simply do not need the level of research you are currently receiving. Whatever the reason, you want to make sure that you select the best service provider possible.

Once the stepchild of traditional stock brokerage companies, online brokerage has hit the forefront in today's competition for commissions to buy and sell securities. Once known only as a place where one might go to pay lower commissions for trades, online brokerage companies, in some cases, provide better research than their more expensive counterparts. And their websites, for the most part, are more useful
in the conduct of your business than those available through traditional, brick and mortar brokerage companies.

Where someone should go can be a function of his age and style of investing. For instance, Fidelity is tailor-made for someone interested in Fidelity's huge array of mutual funds, because buying and selling of them is free. However, if a person is prone to invest in individual stocks, there are many other companies that will charge far less for that service. On the other hand, T. Rowe Price is admired for its capabilities among those people who are soon to be retired. For example, T. Rowe Price will do a comprehensive analysis of a person's portfolio for only $250, far less than the charges of a
financial planner.

As you can see by the commercials on TV, there are an endless supply of brokers looking to manage your money.  Only you can decide which is best for you.  If you do understand your financial needs and do the necessary research, you will likely find the right broker for your hard-earned money.

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