Opening an Account
Needless to say, commissions will be higher with traditional brokerage firms based on the higher level of service they provide, but that is not to say that they are all equal so before you choose, do your homework. And, that goes for discount firms as well. In each case, they will most likely have different fee structures and offer slightly different services. In opening a new account, be aware that you may need to meet account minimums, usually ranging from $500-$1,000 although most will have much lower minimums for IRA, retirement, and educational accounts.
The process of opening an account is generally pretty easy. Most firms will either send you an application or allow you to complete it online, print it, and mail it in with a check. Once you have opened an account, you can start investing, and you can automate the process by setting up automatic monthly withdrawals from your checking or savings to your brokerage account. This can be a great way to invest consistently with very little effort on your part.
But, what about working with a financial adviser? Is that a better route? Tune in next time for the skinny on working with advisers.
Patricia Stallworth, CFP® and CDFA, is the president of PS Worth, a financial education company, the author of Minding Your Money, and the host of the Minding Your Money Minute™. Learn more by visiting MindingYourMoney.net.