Why I think full service stock brokers suck

by admin on June 11, 2011

The main reason is the lack of value for money. It is not uncommon for them to charge many many more times more than what a discount stock broker would charge.

The main reasons I feel they don’t offer value are:

  • Much of the advice they offer is easy to find for free.
  • Many of the advisors offer you bad advice.
  • They get paid handsomely even when they suck.
  • They often do not buy stocks with their own money because they suck so much.
  • They do the job in the first place because they cannot make it on their own.
  • After all the fees and commissions, returns are often considerably lower than a tracker fund tracking the index.
  • Many of the “advisors” are more like glorified salesmen than financial professionals.
  • They often get paid commissions based on sales, they tend not to care about your money, but rather their sales figures.
  • They often charge a maintenance fee even when they suck.
  • When all the fees are factored in, it is not uncommon for a full service broker to charge well in excess of $100 per trade.
  • stock broker con man

    As you can probably tell. I don’t like full service brokers at all. I see them as legal con artists. For me the only way they can in any way redeem themselves is to move their commission structure over to more performance based structure, instead of a day-light robbery kind of structure.

    Of course, they won’t do they, because most of them wouldn’t make any money.

    There are high quality discount stock brokers out there charging less than $5 per trade. Full service brokers often charge well in excess of $100 per trade, but at least you get an incompetent pushy salesman for your money.

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