How To Pick an Investment Broker

Choose the right broker for your needs.

No matter what you do for a living or how much money you have, you need to invest your funds wisely. Opening a brokerage account is one of the best ways to get started with saving and investing, but it is important to evaluate your options carefully before making a decision. Choosing the wrong investment broker could cost you a lot of money.

Instructions

1. Decide whether you need investment advice or just a convenient way to buy and sell stocks. If you need investment advice, seek out a fee only adviser; these advisers are paid only by their clients and derive no income from commissions or from the investments they recommend. If you do not need investment advice, choose an online stock broker; these online brokers allow you to buy and sell stocks for as little as $7 per trade.

2. Contact each investment broker you are considering and request an application. Review the application carefully, including the charges and expenses associated with trading.

3. Review the minimum balance requirement of each brokerage house. Some investment brokers require that new clients maintain a minimum balance, while others impose maintenance fees on smaller accounts. This can be a big concern if you only have a small amount to invest.

4. Check the costs of each trade at the investment brokers you are considering. Some investment brokers use a tiered system to determine trading costs, with large blocks of stocks having a larger commission than smaller ones. Others use the same pricing structure whether you buy 100 shares or 10,000.

References

• National Association of Personal Financial Planners; Find a Fee Only Investment Broker
• Money Magazine: Hiring Financial Help