Full Service Stockbroker and Conflict of Interest in Stock Market Today


What do you think about full service stock brokers in the stock market today?

stock brokers to trade with
by Stuart Miles – freedigitalphotos.net

You may already have a stock broker, but if you don’t have one, one will be needed in order to trade. If you’re going to start trading, you will have to register with a brokerage firm. There is a very large pool of brokerage firms from which you will have to pick one.

When registering with a stock broker you can either choose to have a full time stock broker, or a discount broker. No one will tell you which one to choose, it depends on the service you are looking for.

Or they might even try to persuade you to pick a full service broker if you go to a bank, since the full service one is in their advantage as well. Nonetheless, it will be all up to you to make your choice.

Just like the name says, a full time broker is there to work with you and to provide as much information as he or she can to you. He/she will do his/her best to give you access to most of his/her available services as you are entering into the world of trading.

How does it actually work?

When you register to a brokerage in the stock market today, an account executive or a financial adviser is assigned to you to help you every step of the way. This is very good, right? This account executive is usually someone who is licensed for this position.

The license this financial assistance has is provided by the Financial Industry Regulatory Authority (FINRA). They don’t just take anyone and assign him or her to you; this person is very knowledgeable in this field, and is able to help you with any question that you may have.

Providing personal assistance

Your full time broker will have time to assist you through all your trades. It would even be his or her pleasure to do so because there are commissions associated with the trades. Nevertheless, your broker would try to do everything possible to ensure that you are buying stocks that may be in your advantage.

Advising their clients on which stock to buy or sell

With the full service stock broker, it’s like you have an adviser helping with your trades. This broker can help you to make very difficult decisions that you wouldn’t be able to make all alone. Some people may think that their service is expensive, but some others think they pay for what they receive.

Some brokerages would even let you do all your trades free of charge, but charge you by a percentage amount at the end of the year. In my opinion this would push you to do more trades during a year period knowing that you don’t have to pay any fees at the current time.

I guess this might be their strategy to stimulate you to buy and sell more, so that they can make more money at the end of the year. Just my opinion…

help their clients making decisions

Having someone to help you in the stock market today is very beneficial. Especially if you are new in this journey. The requirements are not too much, but they are very strict on us traders. Having someone holding your hands every step of the way is a great assurance.

The stock market today has transformed tremendously. In the past you would have to actually meet with a broker in a bank in order to make your trades. Not that people don’t still do that, but it would be difficult to spot some of them.

The use of the internet and technology have transformed the way we do our exchanges in the stock market today, making it easier for us, and less time consuming, some even think it’s fun.

Give you total access to their research department

This is my favorite aspect of some full service brokers, although I am not a fan of them. You can even have access to companies research, which is pretty cool, don’t you think? Having information on companies you’re going to invest in is a very important part of trading.

This allows you to have an idea as of what the outcome of your investment might be. But, nothing is guaranteed in stocks trading. I think you know that as well as I do since you read it everywhere on the webs.

Many traders do not take time to look through companies information to ensure that they are making the right move. Having those information readily available to you could be a great advantage because you won’t have to spend countless amount of hours researching by yourself, which most traders don’t like to do since it is boring.

Merrill Lynch, Smith Barney, and Morgan Stanley are some examples of firms that offer full brokerage service. There are many of them, but these three are very popular. Before you register with any full time broker, it is a must that you read their service descriptions. While you’re at it, don’t forget to read their fine prints as well.

Don’t just assume that you will receive this or that type of service from any full time broker. It does not work that way, they are not all the same, and definitely do not provide the same complete service.

Full time brokers give reassurance

If you are not someone who’s very dependent, trading stocks can be difficult for you. Not that it’s easy for everyone else, but being dependent makes it even harder for some traders. Therefore, having someone who’s there for you to help you every time needed can give you confidence in the trades you are making.

One other good aspect of full time brokers is that they cannot slack with their services. The best of them is always expected, because traders pay for the best, they expect that.

They also have to ensure their clients are winning most of times. That’s the reason for hiring them, if they can’t deliver, there’s no need for them. This is how they are judged also, by how they are performing.

Getting paid for every trade made by their clients

One thing that is very controversial is that full time service brokers are getting paid every time their clients trade. It is considered as a conflict of interest, it’s definitely is conflict of interest.

This is the downside of this service, given that their are getting commissions on your trades, they may try to make you trade more than you suppose to.

For this reason, many people don’t like full service brokers. I don’t blame them because there’s no way you can fully trust them in this sense.

Some people even claim that their brokers make them buy and sell their shares too often, which is in their advantage.

In order for this service to be taken more serious, they have to change this strategy. It is not working for us traders. This is one of the reasons why I don’t put my money on full service brokers, I just don’t trust them.


Although you would find several traders  who do business with full service brokers, and they are actually enjoying it. many of other would tell you they don’t support this type of service.

At the end of the day, you are the one who should be looking for your best interest. Although full service brokers would try their best to ensure that you’re not losing your money, the conflict of interest is a huge issue.

It would be very hard for you to know if they are really working for you, or if they are doing it to put commissions in their pocket.

If you have signed with a full service broker before, tell us about your experience in the comment section bellow. I believe many of our readers would like to read your experience as it can help them with their choice.

Also, don’t forget to share this blog with your friends through the social media sites. Until then, happy trading, and don’t forget to trade smart.

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