Full Service BrokersFull Service brokers provide a variety of services for their clients including research, advices, retirement planning, and tax planning. For this they often charge more than discount brokers.Advantages and Disadvantages The advantage of this plan is that they offer you a lot more tools and advice then you will find from a traditional broker. You can also get information on retirement planning and tax planning. Discount brokers will not be able to give you the same advice as service as these big companies do. In short they help people who do not have time to stay up to date with taxes or wealth management. The downside is definitely the cost. While a discount broker may charge you between $5-30 per trade a full service broker can charge you between $100-150. Also some may charge an annual maintenance fee on top of that. The biggest problem is that brokers get paid not on performance but on commission. So you could be paying top dollar for bad advice. That is always a risk, even though they probably have some regulations when it comes to picking brokers and financial experts, there is always risk when you let someone else give you advice on how to manage your money. After all, nobody cares about your money more than you do. If you are still interested here is a list of brokers who fit this category. Merrill Lynch Smith Barney Morgan Stanley Who Should Use These Brokers In short these brokers are best used when you have enough money to invest that the higher commission rates do not hurt you as much. They are also better if you are not comfortable investing into the market by yourself and want some experts to help you learn, give you advice, and get you on the right track for retirement. |
