The Full Service Broker

A Full Service Broker provides many different types of investment services to their clients as opposed to a discount broker which usually provides a more limited number of services.

Here are some of the services you will typically find available at a Full Service Broker:

• Investment planning and advice.
• Retirement planning and advice.
• Tax planning and advice.
• Estate planning and advice.
• The ability to have a physical broker place trades for you.

Notice in the above items the words "planning and advice". This is one of the major differences when comparing to a discount broker. If personal planning and advice is what you are looking for, this may be the type of broker you should look into.

The target client for a Full Service Broker is someone who wants a hands off approach of their investments and wants to rely on the research, advice and recommendations of someone else.

In contrast, a discount broker typically conducts business online so most of the services available are self directed. You may be able to pay extra to have full service broker-like services, but they usually are only just that, broker-like.

Full Service Brokers typically charge either an annual maintenance fee or a percentage fee based on assets in your account. These fees as you can guess, are much higher than using a discount broker, due to the services available (so they say). This is the case whether or not you utilize the wide variety of services available to you.

Besides having higher costs, a problem with relying on a large full service broker is that you really don't know if you are being given good advice or not. 2007 through 2009 so far has proven this. For example, look at Lehman Brothers or Merrill Lynch. I don't think I need to say anything more, you can probably tell how I feel about this topic. Although there is another option.

Besides the typical large full service brokerage firm like Goldman Sachs or Morgan Stanley, you can look into opening accounts with a company like Fidelity Investments. Fidelity Investments combines full service and discount broker choices into one.

Just so you know, I have been a Fidelity Investments customer for several years. I can tell you that they provide the services I mentioned above in this article, but they also provide all of the tools for a person to self direct and research their own investments online, all at a reasonable cost. Here is a link to their website for more information if you would like to see what they offer: Fidelity Investments.

Another thing to know is that some of the services mentioned on this page are offered by a Financial Planner and/or Accountant. If you are looking for help in some of the area's mentioned at the beginning of this page besides investing, looking into one of these other options may be something you want to look into.

If you do decide to use a Full Service Broker, do yourself a favor and make sure you pay close attention to any statements you receive, follow up personally on any advice you are given and if you are not sure about something, don't be afraid to ask for help.

Return From "Full Service Broker" To "Online Brokers"