Transcript: Tips for Choosing a Brokerage Firm

Hi, my name is Jon and Im an independent investor from Kansas City and Im going to share with you a few tips on selecting a brokerage firm for About.com.

Before you can begin investing you must open a brokerage account. As an investor, choosing the right brokerage firm is an important decision and here are few things that you want to look into before you look into an account.

The Brokerage Firms Services

There are two different types of brokers. Full Service and discount brokers. With a full service brokerage firm, you will work personally with a stock broker and you will discuss investment ideas, let you know how your investments are performing, and are generally available to talk with on the phone or email. Examples include, Edward Jones and Raymond James. Discount brokers on the other hand are for people who like to invest on their own, and this can easily be done through an online broker like e-trade and TD Ameritrade.

Basically you access your account online, put in a buy or sell order and click the button yourself.

Brokerage Firm Commissions and Opening Balance

Full service brokers charge a higher fee for their service while discount brokers charge a lower fee, anywhere from 5-12 dollars per transaction.

Check to see what the minimum opening balance is for an investment account and also be sure to check if there are any maintenance fees if you balance falls below a certain amount.

Brokerage Firm Tools and Websites

Full service brokerage firms will provide research for you with reasons on why this particular stock may be a good investment, whereas with discount brokerages you will have to gather the information yourself in order to make your decision on whether to buy or to sell. Also be sure to check with which tools are best for you, such as price charts and indicators that you would want to use.

Lastly, Check out the websites of the brokerages you are considering. Get an idea for how well you like the site and how well you are able to navigate and look around at all of the information.

Thanks for watching and for more information on stocks and investing be sure to check us out on the web at money.about.com.

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