Full Service Brokers
These firms are generally large and provide the most extensive list of services. Most allow you to select an individual account advisor. These professional advisors can also act as financial advisors providing guidance on which investment might be right for you. These firms create their own research and recommend stocks to either buy or sell. These firms have traditionally charged a commission each time a stock was bought or sold. Commissions vary according to the number of shares and the dollar involved, but average about 2%. These firms also offer two different but similar types of accounts where you pay a fee vs. a commission:
Full service brokers also offer a wide variety of services such as credit cards, bill paying, ATM and other options. Full service brokers are an excellent option for those with large portfolios, users who want to get advice before they make investment decisions, and those seeking comprehensive research that want to be able to pick up a phone or meet with their advisor.
- Asset-Based Fees: An asset-based fee is one where the broker charges a fee based on the size of your portfolio (assets under management), which could be from 1.5% to 0.75%, instead of per transaction commission fee.
- Wrap Account Fees: This is similar to an asset-based fee program, where you pay a percentage of your assets vs. commission. You get an outside money manager, vs. a stockbroker. The fee is generally higher than an asset-based fee from .06% to 3% and a minimum portfolio size is