“Finding an investment advisor with both intelligence
and integrity is possible, but--if you’ll forgive the
cliché--it’s like looking for a needle in a
haystack.”
- Marlene Jupiter, author of
Savvy Investing for Women
You need a brokerage account in order to trade individual
securities, such as stocks and bonds. You may opt for a full
service brokerage and meet regularly with your financial advisor
or go the lower end route with a discount online brokerage
account, where you make your own decisions and conduct your
own trades online.
Each brokerage varies with respect to the depth of products
and services it provides. The following gives you a broad
overview of what a brokerage firm can offer:
Services: Investment advice, real-time quotes, research,
investment information and tools, online trading, touch-tone
trading, Web site account access, check-writing privileges,
and margin loans.
Products: Full selection of traded securities and
mutual funds.
Payment: Some advisors may charge you an advisory
fee plus receiving a commission from the companies whose investments
they recommend.
Benefits: It’s your broker’s job to recommend
a variety of investments that, in his or her experience, have
performed well and met the objectives of clients with similar
profiles. Don’t be alarmed if you’re presented with
several choices--this will keep you in the loop and force
you to learn more about your investments. Your advisor may
periodically call or send information he or she feels may
be of particular interest to you. A financial advisor should
be regarded as an ongoing resource for financial information.
Disadvantages: The disadvantage of relying on a broker
is that you are entrusting your finances to another person
who may offer you bad advice and cause you to lose money.
Just remember that anyone selling you a security is required
to give you a prospectus and disclose the various risks associated
with the investment. It’s your responsibility to ensure
your investment selections are appropriate and have well-balanced
risk and return prospects.
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