Choosing a Stockbroker: Finding a Money Manager You Can Trust

With all of the bad press that you hear about stockbrokers lately how do you find one that you can trust? It may seem that it would just be easier to handle your own investing. Unfortunately, not all of us are experts in the field of high finance, and making a mistake with your investments can be quite costly.

So how do you choose a stockbroker that is right for you? Thanks to the financial modernization act almost everyone can now sell you securities. All they need is a series 7 and a series 63 license. If they have a series 6 license they can sell you mutual funds without the series 7. You can visit your insurance agent, your banker, an investment company, and even do the investing yourself through a discount brokerage.

Which of these is best? The answer, like with so many other financial decisions is that it depends. Choosing a stockbroker is a hard process and requires due diligence on your part. Here are a few suggestions to get you started.

What kind of broker are you looking for?

While every broker should be able to offer you products that fit into your risk tolerance and meet your goals some brokerages specialize in certain areas.

An insurance company will likely offer fixed and variable annuities. Depending on your risk tolerance and the details of the annuity contract either of these can work for a more conservative investor.

A bank brokerage division usually offers a wide range of investment products. Since banks are, by there very nature, risk-averse most of the offerings at a bank will lean towards safer less risky products. Mutual funds are a favorite of bank brokerage funds.

An investment company can provide you with a wide range of investment products, annuities, mutual funds and stocks. If you tend to be a little more tolerant of risk they may not be a bad place to start your search.

No matter where you decide to invest be sure to play close attention to the products being offered and understand all of the terms and conditions.

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