Knowing your Full Service Stock Broker
Knowing your Full Service Stock Broker
Finding a good, reliable and efficient stock broker is probably one of the best investments any stock investor can make. As you would probably know by now, any trading activity requires the services of a stock broker. They are the executors of your stock investment decisions and sometimes they even give you stock investment advice. Stock brokers is the stock investor’s key to the stock market world. It is therefore of utmost importance that any novice in the stock market to get acquainted with the concept of the stock broker. In general, stock brokers are people that are licensed by the government to be the agent of stock investors in buying and selling stocks. There exists a principal and agent relationship between the broker and the investor. The broker has a fiduciary obligation to obey the stock trading commands of the investor and to keep the investors money in trust. In turn, investors obligate themselves to compensate for the services of the stock broker. Usually, investors charge per stock trading transaction.
There are two kinds of stock brokers, depending on the stock investor’s needs. They are the full service stock broker and the discount stock broker. They are able to set up two very varied accounts for the investor.. The full service broker, as the name may suggest, offers complete services and not merely execute your stock trades for you. Full service brokers gets to know who you are as an investor and as a person. He will ask you to give out information about your financial situation such as assets and liabilities. He will inquire about your past investment ventures as well as your future investment goals. He will ask your views about different companies and assess your risk-taking tendencies. A full service broker needs to get inside your skin to be able to know how your attitude towards stock trading. This is because a full service broker also gives stock investment advice for the investor. He needs to know if the investor is a risk taker or not. He will recommend which stocks to buy or sell and when to buy or sell these stocks. He may also recommend other important investment decisions. Of course, the investor is in no way obligated to heed the advice of the full service stock broker. Because of their ‘full service’ nature, full service investment brokers also charge a lot more in their fees.
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