What you need to know before choosing a full service stock broker

A full-service stock broker means what its name indicates. They offer as many services as possible for those who open accounts with them.

A representative will be assigned to your account after you open an account at a brokerage firm. This representative is called by titles such as account executive, a registered rep, or a financial advisor by their brokerage firm. This person typically has a securities license and is knowledgeable about stocks and investing in general.

Examples of full-service brokers are Col Financial and Eastern Sec. Most brokers these days utilize full-featured websites to provide investors with further information about their services. You should research each before you open your account.

How stock brokers can help you

The account executive assigned to you is responsible for assisting you, answering queries about your account as well as the securities in your portfolio. He is also involved with transacting your buy and sell orders. Here are a couple of things that full-service brokers can do for you:

Give advice and guidance. Full-service brokers, unlike discount brokers offer, more personalized attention. You’ll be on a first-name basis and you can disclose much information regarding your finances and goals. The rep is will make bespoke recommendations about stocks as well as funds that may be suitable for you.

Provide access to research. Full-service brokers provide access to their premier investment research department, which gives you in-depth data and analysis on a company you’re interested in.

Help you achieve your investment objectives: A good rep understands you and your investment goals and then offers advice and answers any question you have. He can give sound strategies that help you accomplish your wealth-building goals.

Make investment decisions on your behalf. Many investors don’t want to invest their time when it comes to investment decisions. Full-service brokers can also make decisions for your account with your authorization. Just be sure to require brokers to clarify their choices to you.

Watch out for these things:

• Brokers and account reps are still salespeople. Regardless of their treatment, they’re still compensated depending on their ability to generate revenue for the firm. They produce commissions and fees from you through the company.
• Let your rep explain a suggestion or recommendation. Always them to explain decisions and always request a complete answer including the reasoning behind the endorsement. A good advisor can clearly explain the reasoning behind their suggestions. Don’t take it if you don’t fully understand and agree with the advice.
• Handing over decision-making authority to your rep can backfire. It’s always dicey to allow others to make financial decisions for you especially since it’s your money. If they make bad investment choices, then you lose money and you may not be able to recourse since you authorized them to act on your behalf.
• Some brokers are engaged in churning. In a nutshell, churning is buying and selling stocks simply to acquire commissions. Churning is essentially good for brokers but bad for customers. An account that shows a lot of activity should be flagged. Commissions, especially by full-service brokers will take a big bite from your wealth, so don’t tolerate this or other suspicious activity.

End Note

There you go! The best way to start stock investment is, of course, to hire services from a reliable stock broker company like ESDC. As always, remember to research their services exhaustively to see if it fits your preferences before signing in. Best of luck!