Using a full service broker, pros and cons

We live in a time of real economic concern. We live in a time when we are never sure what will happen in the next couple of days. The stock market is up one day and down the next. People loose thousands of dollars everyday, and many of us are terrified that we might loose our retirement funds. In the midst of this financial crisis we need to remain calm and to become educated about the situation. Panic will only lead to severe problems and potentially a depression. As with any financial situation, we need to consult financial experts who can be trusted and work accordingly. But with so much information flying around about the economy, who can you trust with your money? We are told that the market is in a recession. Does this mean that you should not invest? People are making wild accusations about greed and are very angrily demanding that the government do something about it. So how will you find reliable people to help you invest? When looking for a financial broker you need to know a few things about the different types of brokers and why it might be better to have one type rather than another.

There are two basic types of broker, a full-service broker and a discount broker. A full-service broker is probably someone who works for a big investment company such as Smith Barney or Morgan Stanley. These brokers are supposed to be very well educated and experienced when it comes to the market. A full-service broker is paid to research various investments. They also should know things about tax laws so that they can give you good advice. Full-service brokers usually charge a large amount of money for their services, so you need to keep this in mind if you are going to use one. A discount broker is basically someone who does not work through a major broker. Their services will be much cheaper but there are no real guarantees as to the value of the advice they might give. Most average investors will probably want to go with a discount broker, simply because the cost of using a full-service broker can be a bit much.

In terms of pros and cons there are a couple of things you need to know about full-service brokers. The major con is that they cost a great deal and there is still little guarantee that their advice will be much better than a discount broker. Usually full-service brokers are used by people who have so much money that they do not want to manage it themselves. So if you want to make your own decisions you should consider using a discount broker. The positives are that you have someone with real experience working for you. Investment houses survive and fail based on how well they do and wha their customers think of them. If they always made bad decisions or gave bad advice they would not stay in business.

In troubled economic times you clearly want to go with someone who knows what they are doing. However, it should be recognized that in such a chaotic atmosphere even the most experienced investors don't always know what is going to happen. Take advice with a grain of salt and make sure to diversify your investments. Realize that putting all of your money into any investment, regardless of what a full-service broker might say, is always a bad idea. Always research a full-service broker before you decide to use their services.