Guide to Full Service Brokers

Full service brokers offer an array of services including stocks, bonds, annuities and insurance. Discount brokers provide some of the same services but don't charge high commissions. The commissions often seem so hefty that they have spawned a recent increase in do-it-yourself discount brokerages, where you can build a stock portfolio online without having to consult a broker. Your knowledge of investing and cost of investment services should factor into your decision when choosing any kind of broker service.

Consider the following when deciding whether a full service broker or discount broker will best serve your needs:

1. Full service brokerage firms versus discount brokers

2. What you have to invest with a full service brokerage, including commissions

3. The reputation of the full service or discount broker

Action Steps
The best contacts and resources to help you get it done

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.

Tips & Tactics
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.

The official source of Full Service Brokers is the Full Service Brokers page at Business.com