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Know the benefits of working with a full service brokerage company

A full service investment broker is a professional providing a key service. Because it has the expertise most investors don't have, it is a valuable resource. In addition, the brokers often make investing and serving investors their full time job, meaning they keep up with trends and market news.

I recommend: Hire full service investment brokers when possible, especially for large investment portfolios. If you are unsure of the benefits or reasons behind hiring these professionals, do some research. SunCor Financial provides a list of benefits of working with a professional brokerage firm. The Forum of Private Business provides an extensive amount of information about the process of hiring a broker.

Find full service broker experts that are affordable

Coupling affordability with professional service is possible, but it takes some research. The costs of hiring a broker range widely based on the services required and the company selected. Affordable, discount brokers are an option for those investors needing basic services. Choose the most affordable full service stock broker needed.

I recommend: Research discount brokers and full service brokers online to find out what their rates are. Broker-Review is a resource of fees charged by online discount brokers. The Motley Fool is an excellent resource of the costs of brokers of all types. Use these tools to estimate costs, to compare services and to find an affordable full service broker dealer.

Consider a full service commodity broker or other specialized services

Choose full service commodities brokers based on need. Some companies and independent brokers may be specialists in specific types of finance. Select these professionals as needed.

I recommend: Determine the best full service commodity brokers available. Use FuturesLinks to help find some of the top brokers available. TKFutures provides an in-depth resource to help investors know who to hire and why they need them. Consider their services as one option.

Helpful advice for making the most of this Guide

• •  Full service broker commissions are one of the many ways investors pay for full service brokerage service. Choose a broker that is affordable, with lower commission, only when their services offer reliability and expertise.

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Consider whether a full service brokerage will provide what you need

Full service brokerage firms charge investment fees for extra services that discount brokers don't offer. The brokers are paid by commissions, which means they could advise you to buy and sell even when it doesn't meet your needs. The plus is that full service brokerages are staffed by experts and they are very knowledgeable about the entire process.

I recommend: ThinkQuest breaks down full service brokerages' commissions to give you a clear idea of what kind of fees to expect.

Factor full service broker commissions into your budget

Whether you choose a full service stock broker or a discount broker, you'll need know exactly what you'll spend by combining the commission and what you actually invest. If you think commissions for a full service commodity broker would be too steep but you still want to invest, discount brokers may be the way to go. If you are a first time investor, some discount brokers offer inexpensive services even if you have very little investment capital.

I recommend: Turn to the Motley Fool for a list of requirements for discount brokers. Look into one of the "Big Three" discount brokers: E*TRADE, Charles Schwab and TD AMERITRADE.

Pick a reputable full service brokerage company based on ratings

The assortment of options are endless for both discount brokers and full service brokers. Pick a service with a solid reputation, especially if you decide on a full service brokerage firm where you'll pay heavily for the advice of the broker.

I recommend: SmartMoney ranks both full service investment brokers and discount brokers. To have an in-depth review of broker options including user reviews e-mailed to you, go to Broker Adviser. Forbes offers a review of the top full service stock brokers. Consult the website of the North America Securities Administrator Association for your state representative. The NASAA reviews investment professionals and enforces laws surrounding their practices.

Helpful advice for making the most of this Guide

• •  Some online discount brokers offer phone consultations with professional stock brokers for a fee. Make sure you know what the fee is since it may be equal to the commission of a full service commodity broker.

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Learn about trading through online video presentations of full service brokers

Online presentations can save you time. You should see if the full-service broker has an online presentation on how to place an order for investing in securities. The presentation should show you step-by-step how to get to the order screen. Then it should show you how to place an order. Other online presentations you should look for on the website of your full service broker dealer are how to create and understand charts and analyzing markets.

I recommend: OptionsXpress provides a detailed presentation of placing an order. In addition, if you need to see your previous order, OptionsXpress allows you to click on a button to take you to it. Another full service broker dealer you’ll want to check out is GFT Forex. This broker has several video tutorials you will find useful. For example, you can learn how to use its charts, add RSS feeds, and more importantly, place orders.

Watch webcasts or webinars on the websites of full service brokerage firms

Find out if the full service broker has webcasts or webinars on its website. These methods can be very educational. Besides learning how to analyze markets or using charts, webcasts or webinars can have speakers that present information on the overall market. For example, the speaker might talk about why the tech sector is trending higher and how this news can impact your investment strategies. Webcasts and webinars can give you in-depth education that you might not likely find in your newspaper.

I recommend: Scottrade has webcasts designed to quickly give you information. That way, you can make better investment decisions. Do you have an iPod? You can listen to the podcast on your iPod. Charles Schwab also provides webcasts. You can listen to topics such as technical analysis and Schwab’s sophisticated trading tools.

Take advantage of simulation trading that full service investment brokers offer

Executing simulation trades is one of the best educational tools you can use. This tool allows you to test and see how your trading strategy fares in the market. Many full service brokerage firms offer this service. You'll have access to free charts, free quotes, and news analyses.

I recommend: Alaron Futures and Options offers simulation trading. In addition, this firm offers free trial subscriptions to Futures Magazine and CRB Charts. PFG BEST also offers simulation trading.

Helpful advice for making the most of this Guide

• •  Make sure you stay on top of the investment advice that your full service broker gives you. If the advice is not helping your portfolio, then you should consider finding another full service broker.

Guide to Full Service Brokers Key Terms

Get to know more about full service brokers with these keywords

By M. Krasniak, Freelance Writer/Editor

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Financial planning

Financial planning is more than just picking a few stocks. It is an all-encompassing strategy for managing all of your finances, including debts and investments. A full-service broker has the right tools and resources to help you develop a sound financial plan.

I recommend: This article from Personal Finance Tips provides a comprehensive explanation of financial planning.

Equity research

Picking the right stock is very difficult, but full-service brokers conduct detailed equity research before recommending stocks to purchase. Sound equity research is very time consuming, so most people are unable to do it properly. A full-service broker spends a great deal of time pursuing equity research, which makes them very capable of recommending good stocks for purchase.

I recommend: Check out this piece from Investopedia to get an understanding of the current state of equity research.

IPO

Usually, small investors are not able to purchase stocks in an IPO. An IPO, or initial public offering, is the first time a company's shares are offered to the public. Usually, the IPO is restricted to large investors. If you are using a full-service broker, however, you may be able to get in on some IPOs.

I recommend: IPOs are clearly explained on this wiseGEEK page.

Commission

Since full-service brokers provide more services than brokers than only execute trades, they charge higher commissions. A commission is a fee charged for every transaction conducted for the client by the broker. It pays to shop around, because not all full-service brokers have the same commission structure.

I recommend: InvestorWords.com explains commissions in a very intuitive way.

Trade execution

Trade execution is the main service offered by every broker, but not every broker's service is the same. The broker has discretion over trade execution for your account. When you send an order to your broker, it is up to the broker how best to fill that order.

I recommend: You should look over this article from the Securities and Exchange Commission (SEC) to get a good idea of trade execution.

Churning

A possible pitfall of using a full-service broker is that your broker may engage in churning. Churning is excessive buying and selling in your account by your broker. It usually occurs because the broker suggests buying and selling various different stocks very frequently, which is rarely good for a client's returns.

I recommend: This article from Investor Glossary provides a good discussion of churning.