Which Brokerage Firm Should You Pick to Work With
Which Brokerage Firm Should You Pick to Work With
You and only you can decide which brokerage firm you will work with. My advice, check out all the ones out there. See what they offer. Many companies these days offer free trades up to a certain period of time. Some offer free workshops and online courses that can be super helpful. Some offer excellent trading platforms like Think or Swim (bought out recently by Ameritrade).
2 Important Tips for Finding the Best Online Discount Brokers
1. Service, Service, Service – this should be exemplary no matter if you’re paying $5 a trade or $50!
2. Reputation – most brokerage firms are extremely reputable. However, in the past few years, there have been some pretty huge scares with firms going under and the clients losing all their money. Chances are you will work with a firm that has been around for ages. But do your homework before committing.
Which Brokerage Firm is best for you:
Discount Broker – Discount brokers have the lowest commissions. They can vary between $5 – 15 per trade.
The main aspect of a discount broker is that there is zero help from the actual broker with your equities and positions. You do all your own due diligence, deciding and choosing for which trades you want to do. And then the actual execution of the trade.
However, this doesn’t exempt the brokerage company to have bad customer service. You are still a ‘VALUED’ customer and should get the top of the line service. The only thing is you won’t be getting personal help with financial advice and only you will be executing your own trades. But with all my experience, you will be working with one person over and over again. They have the power to become a full service broker if asked, but your fees will become higher.
Most popular discount brokerages:
Ameritrade
Scottrade
Etrade
Full Service Broker
You will be paying premium rates for each trade anywhere between $25 – $50. However, you are getting a lot more for your money.
What you get when working with a full service broker:
- Invest Ideas and access to research
- Retirement Ideas
- Full hands on service
- Answers to your financial questions and advice given for your best investment strategies
- Opportunity to invest in private hedge funds that aren’t normally opened to the public (read more on hedge funds here)
Top Rated Full Service Brokers
Merrill Edge
Wells Fargo Advisors
Morgan Stanley
Edward Jones
Again, these are just a few. There are plenty more to choose from. Your personal banks can also help with this.
NOTE: if you decide to go into futures, that is a whole other market. While most discount brokers work with future contracts, there are special brokers that only work with Futures. Read more about Future and Brokers for Futures here.
