Full Or Self Service?

The amount of help you need investing determines whether you'll need lots of advice or just a firm to clear your trades

that amount, or even less.

Don’t jump to conclusions, though. While discount brokers have a reputation for being “bare-bones” operations offering few services, that’s not, always the case. Charles Schwab, for, example, has introduced mutual fund supermarkets and no-fee IRAs, and will even dabble in a bit of personal finance advice.

Deep discount brokers.
Here, at the cheapest end of the investing spectrum, are a group of brokers who will execute trades at a rock-bottom price, provided you’re willing to settle for no frills whatsoever. If you’re the independent sort who can function on your own, there’s a bargain to be had. Five trades that might cost you $350 in commissions at Charles Schwab might cost $125-$150 at deep discounters such as Dreyfus Brokerage, Brown & Co. or Ameritrade Securities.

ALL THE PERKS
Before you choose between teaming up with a broker or going it alone, it’s a good idea to assess your needs. Are you scared of the market, do you shrink at the thought of crunching numbers or are you jazzed on the thought of diving headlong into stock analysis? Do you eagerly tear through the newspaper’s business pages to see how certain companies are faring? Just how much time are you willing to put into investing? The answer to these questions will give you a decent idea of which way to go. Here’s a hint: the more help you think you might need or the more you’d like to sit back and let someone do the grunt work, the more you should consider a broker. The more time and effort you’re willing to devote, the better off you’d be with a discount firm.

Patricia Mosley was mulling over just how involved she wanted to get in her portfolio when she took a retirement investing course at Chicago State University. Mosley, who has since retired from her post as a librarian in the Chicago public school system, established a relationship with her instructor, Robert Cotton. And five years later, she remains a devoted client. “He doesn’t have his own agenda,” she says. “He listens and helps me to get what I need. For now, the emphasis is on trying to keep my current taxes low while providing me with some income and future growth.”

After attending several seminars, Thomas decided on a full-service broker. “I discovered how complex the market is,” she says. “I knew that I wouldn’t have time to keep up with everything. So I chose to find someone I could trust, even if that meant paying more in commissions.”

Friends and relatives referred Thomas to Fields, the independent broker with National Securities. “At our first meeting,” recalls Thomas, “he didn’t try to sell me anything. He asked me about my goals and recommended that I put my investment capital into a money market fund. Eventually, he began suggesting individual stocks for me to buy.” Fields prefers individual stocks over mutual funds for some clients because the growth potential is greater.

One of the main reasons for choosing a full-service broker is to take

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