Choosing an investment broker

If you're new to investing, one of the first things you will need to do is select an investment broker. Choosing the right broker is crucial to the success of your portfolio, and the following tips will help you to select the right investment broker for you:

There are two main types of brokers - full-service brokers and discount brokers.

Full-service brokers
A full-service broker is an actual human being. This type of investment broker researches various types of investments and will keep you informed with timely market trends, stock performances, and laws. At the same time, he or she will also act as a mentor or sorts, providing you with recommendations and ideas.
Ideally, a full-service broker thoroughly researches various investments and keeps you up-to-date with market trends, stock performance, and tax laws, while providing you with investment ideas and recommendations.

A full-service broker's fees vary from broker to broker, but can be as high as $150 for a trade; this is compared to the $5 and $30 an investor would pay online with a discount broker. In addition, investors can expect to pay an annual service charge or maintenance fee for your account. This is also on top of the commission the broker receives when he or she sells yours stocks or bonds.

Discount brokers
Most likely you've heard of E-Trade, scottrade, or Charles Schwab. These are all discount brokers and are much more affordable than a full-service broker. With these types of brokers, you simply sign up for an account on their website. If you run into problems or have questions, you can call a help number for support.

Discount brokers are good for average investors who want to make their own decisions (and are comfortable doing so) about their investments and their portfolios. The fees for discount brokers vary, but they typically include a fee to trade and sometimes account maintenance or commissions as well. Regardless, it will be less than a full-service broker's fees.

Choosing a broker
If you decide to go with a full-service broker, meet with the broker in order to determine if he or she will be a good fit for your needs. The following tips will help you to pick the best broker for you:
Make sure the broker handles the type of investment you are interested in. This may seem fairly obvious, but many brokers specialize, and there are many different types of investments, including stocks, bonds, mutual funds, options, offshore trading, and so forth).
Know the fees. There will always be fees associated with a full-service broker, so it's important to see the schedule of fees so you will know what you will be charged for, such as commissions, account maintenance, yearly fees, fees for closing your account, inactivity charges, and trading fees, and when you will be charged for these things. If it seems like the fees are too excessive, consider a different broker or a discount trader.
Make sure you know all of the services your broker offers. These can include the ability to make trades over the phone or online, the availability of different types of research information, and being able to write checks on your account.

An investment broker can prove invaluable for you if you're new to investing, if you have a great deal of money tied up in your investments, or just if you would like a little extra help.