Essay About Brokerage Fi Rm And Full-Service Fi Rm

Strategic Management
Strategic Management
1. Determine how much and what type of service
you want from your brokerage fi rm and stockbroker.
A full-service fi rm will off er investment
advice, make recommendations, and off er
research support. A discount broker typically
charges less than a full service fi rm,
but doesnt make recommendations about
buying or selling a specifi c security.
2. Research your brokerage fi rm and stockbroker.
Stockbrokers must be registered with each
state in which they regularly conduct business,
and licensed through the Financial
Industry Regulatory Authority (FINRA).
Call the Maryland Securities Division,
410-576-6494, to verify the fi rms and the
stockbrokers registration and to check for a
complete disciplinary history. You may also
check BrokerCheck on the web at www.
fi nra.org/InvestorInformation/Investor-
Protection for some information, but not
necessarily all adverse information, on fi rms
and their stockbrokers.
Ask for and check references from several
clients. Ask these clients how much better
off they are as a result of the services of the
stockbroker.
Dont make a decision about a brokerage fi rm
or stockbroker based solely on a telephone
solicitation, advertisement, or seminar.
3. Ask about fees and commissions.
Most brokers earn commissions when they
buy and sell investments on behalf of their
clients. Make sure you understand these costs
before opening an account.
Many brokerage fi rms charge ongoing fees
related to the maintenance of your account.
Make sure you understand these fees and how
they are charged to your account.
4. Determine your investment needs and objectives
such as short term profi ts, long term growth, steady
income, and tax savings.
Make your goals clear to your broker, preferably
in writing.
Your investment goals should be accurately reflfl
ected on your new account form. Check the
form and get a copy for your records.
If your investment goals
change, be sure that your
brokers records and your
records accurately refl ect your
revised objectives.
200 St. Paul Place • Baltimore, MD 21202 • 410-576-6360
www.oag.state.md.us/Securities
How to Choose a Stock Broker
Investor Education Securities Division, Maryland Attorney Generals Office
5. Determine your tolerance for risk.
Your new account form requires that you
specify the level of risk you are willing to
take to achieve your fi nancial objectives. If