I have decided to switch my CDs over to mutual funds. My bank has set me up with a broker that works for the investment side of the bank. To me, he seems like a salesman. I dont know much about stocks, etc. How much should I trust this type of broker with my life savings? Do these guys really know what theyre talking about? Do they take their jobs seriously or do they just try to sign up as many customers as possible? He seems to listen to my needs pretty attentively, but I cant tell if its an act because he wants my account.
2007-07-15 14:28:08 · 8 answers · asked by Kristin A 1 in Business & Finance ➔ Personal Finance
Usually these guys genuinely care about their customers...there are some who only care about their sales quotas. It is going to be that way any investment firm you go to. Shop around some, find someone you are comfortable, but I will suggest that you find someone you don't have to pay an annual fee to go to...it is ridiculus to pay someone to manage your money, they get a big cut from the investment companies they sell your investment to. There are some out there that charge large fees (Amex investments) and your bank probably doesn't.
2007-07-15 14:35:50 · answer #1 · answered by Anonymous · 0⤊ 0⤋
Stock brokers can be trusted from the big wirehouses, I wouldn't trust a broker cold calling you from some schlock house you never heard off. The reason I say this is because from the bigger houses the brokers usually are more than just salesman and possibly manage the accounts. Typically a stockbroker is a salesman, they don't do the real analysis of the stock that is pitched, I never heard of a stockbroker working 18 hours a day either. Also, what Marshall is saying about when you buy a stock the money goes to the company and grows the economy, well that is slightly true. That is only true during IPOs and new equity offerings (known as secondaries, which isn't good because it dilutes you as an equity holder). Otherwise when you buy a stock it is done in the secondary market meaning some other investor owns it and is selling it to you. Yes, treasuries are safe, but use that as a means of parking cash during difficult times. You will yield a negative real return by holding these to maturity. You can feel safe at etrade, ameritrade (I recommend this one), merrill, or the various other ones because it is an account. If you don't have much money to invest then your accounts typically will be self managed and thus you would execute your own trades. If you have a good deal of money and your own wealth manager well, they can execute traders for you and you can request that they consult you before any and every change to your portfolio. This is a very complex industry and no, it isn't some wild west no rules smash car derby type of arena. Yes illegal things happen, but many other industries slid and do illegal things as well. This happens when a specific person gets greedy, do not blame an entire industry for the mistakes of few. If you were like many and thought wall street was a bunch of crooks and panic sold during the crisis, you missed out on massive gains, and your portfolio would have been more valuable being at the same levels pre-crisis. People in that boat probably listened to their adviser or did a bit of research to understand what was going on, I am not accusing you of anything but I thought it was worth noting
2016-04-01 06:02:31 · answer #2 · answered by Anonymous · 0⤊ 0⤋
Most brokers are honest, but may have different influences. You want a broker who has a fiduciary duty (http://legal-dictionary.thefreedictionary.com/fiduciary+duty) to you and not to himself/herself or some other entity. When I hear someone say they are talking to an investment broker at their bank it worries me. An investment CAN'T work for a bank... although many of them like to set up their offices in bank buildings and other financial offices such as credit unions, etc. They will even create business cards that look as if they work for the financial institution (by saying offices in ABC Bank, etc.) but if you ask outright if they are employees of the bank they will have to answer "No..." and then they will put some spin on the relationship to the bank. This type of broker will be more than willing to give you "free" advice and will also sell insurance products (insurance is NOT an investment vehicle). If their advice is "free", you have to ask yourself who is paying their paycheck. And then are their allegiances to their employer or you?
Instead you want to hire a "fee only" adviser. (Don't confuse this with a "fee based" adviser, it must be a "fee only" adviser). Hiring a "fee only" adviser creates a fiduciary relationship and ensures that the adviser is working on your behalf with your best interests in mind. They can be held accountable if they sell you products that benefit themselves or their employers more than they benefit you. The "free" adviser at your bank can't be held to that standard. You can find a "fee only" adviser at http://www.napfa.org/
2013-12-19 19:18:37 · answer #3 · answered by Boomer 1 · 0⤊ 0⤋
He is a salesman. That doesn't mean he's a crook. Just because he might be honest doesn't mean he knows what he's doing. You need to do some reading until you know enough to figure out some of the basics yourself.
2007-07-15 15:17:52 · answer #4 · answered by Ted 7 · 0⤊ 0⤋
Ask someone you can trust before you follow his advise. You can bring the material home and compare it with other banks online before you buy too.
2007-07-15 14:32:35 · answer #5 · answered by Frankie 4 · 0⤊ 0⤋
He's a bank employee, right? Who signs his paychecks? Ask your friends who they deal with.
2007-07-15 14:31:49 · answer #6 · answered by Anonymous · 0⤊ 0⤋
These types of guys ARE salesmen they make commissions. They are good at it so it may seem that they are looking after you but they are looking after themselves.
2007-07-15 14:37:19 · answer #7 · answered by Tyrone 3 · 0⤊ 0⤋
One quick suggestion. If you don't feel comfortable with this guy, find someone else.
2007-07-15 14:32:05 · answer #8 · answered by Barry auh2o 7 · 0⤊ 0⤋