Most likely the answer lies in protection for the investor, but this is a question I have often pondered, and am looking for a professional answer outside of the simple "so you don't get screwed".
THANKS FOR TAKING THE TIME :-)
2006-06-20 06:04:32 · 6 answers · asked by officer_j_d_tippet 2 in Business & Finance ➔ Investing
Some companies do allow you to buy stock directly from them. They use Direct Purchase Plans (DPP) and a Dividend Reinvestment Plans (DRIP).
2006-06-20 06:33:48 · answer #1 · answered by Steve S 4 · 1⤊ 0⤋
Most securities are traded through brokers. This is how they make their money, by charging for the service.
Some companies do sell their stock directly to investors. Contact the Investor Relations department at the company that you are interested in. You may discover that the time and hassle of dealing directly may make the the borkerage fee look a lot more attractive unless you're buying a large block of shares.
2006-06-20 06:31:02 · answer #2 · answered by Bostonian In MO 7 · 1⤊ 0⤋
That is how the brokerhouses make their money. Stocks are issued and managed by companies known as a brokerhouses. Brokers issue and back the value ofthe stock based on a companies credentials and proven history of finacial stability. They sell these stock in an IPO. This money goes to the company that has allowed their stock to be issues (ie the company you choose to own stock in) and after that, the company will get a small comisson for each stocke sale why the brokerhouses will make their money off of fees and increases in the stocks prices.
The fee is used to pay fees, comissions, the issuing brokerhouse, the company and let's not forget the government gets their piece of the pie too.
2006-06-20 06:12:37 · answer #3 · answered by jnrockwall@sbcglobal.net 3 · 1⤊ 0⤋
With fees so low, below $10 per transaction, why do you care?
It's how the business is set up. It is called "The Market." They make the process so simple. Yes, you can buy direct from some of the companies if they have a department set up for that and allow it, but it will take you hours and many phone calls or letters to save $10. Again, the question becomes, "Why bother?" After it's all said and done, you'll probably get a better price in the "market." How much do you save then, if anything?
2006-06-20 06:33:28 · answer #4 · answered by dredude52 6 · 0⤊ 1⤋
Some companies have direct investment options where you can get shares directly from the company, bypassing the broker. Try searching on the company website. It may be located under an Investor Relations link/tab.
2006-06-20 06:28:09 · answer #5 · answered by The Krieg 3 · 1⤊ 0⤋
Many banks give you a discount on stock purchases if you have a large amount of money in the bank. You can only legally buy or sell stocks if you are licenses by the SEC (securities and exchange commission). And even then, only a select few get to trade on the floor of the stock exchange.
2006-06-20 06:12:09 · answer #6 · answered by seek_out_truth 4 · 1⤊ 0⤋