Get referrals. If your financial goals and needs are fairly involved, and you think it's worth your while to spend the extra money in return for full service, start asking around among your friends and colleagues for some referrals.  You are entrusting your assets with a broker, so it's critical to find someone who'll have your full confidence. Besides helping you build an investment portfolio, you should be able to meet with a planner who will review your complete financial situation and set up a profile based on your assets, income and goals, before advising you.

Full service firms can also help with referrals for accountants and lawyers to deal with some of the more complicated components of personal finance, like taxes and estate planning.  Before you sign with anyone, make sure you get a commission schedule that spells out the fees you'll have to pay. It's also important to know how your broker is paid. Will he or she receive commissions for selling certain financial products (which may or may not be in your best interest)?  Unfortunately, financial services is a field notorious for corrupt characters and scam artists, so it's important to ask the tough questions and feel comfortable from the start. Check the background of your potential broker at the Financial Industry Regulatory Authority's web site.

Get credentials. Before you invest, make sure your broker and investment adviser are licensed to sell securities. Your state securities regulator or FINRA can provide you with all kinds of helpful info. They can also give you access to something called the Central Registration Depository. This computerized database will tell you if a broker is properly licensed in your state and if he or she has a history of regulatory run-ins or complaints from investors. You can also learn about a broker's educational backgrounds and previous job history here.

 

In the end, the best stockbroker for you is the one that will meet your particular needs.  With the online firms and deep discounters, you basically get what you pay for—no advice, no research and no hand-holding. Unless you're prepared to fly completely solo (and accept the attendant risks), you're probably best off seeking some form of professional advice, whether from a reputable discount firm or a full service brokerage.

 

 

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