Why use a
Stockbroker?
Q:
I have often wondered, "If a broker really knows what
the right investments are,
why would he/she share that information outside his/her
immediate family?" What are
your feelings?
A:
Well the easy answer is brokers don't always know what the
"right"
investments are. In truth, nobody really knows what the right
investments are. That's one
reason the best brokers don't offer themselves as stock pickers
or market gurus. I believe
that the biggest asset a broker can bring to the table is
his/her ability to be an advisor
or a coach. A broker should be your eyes and ears in the
investment world and help you
avoid making costly mistakes.
Your objective in investing is to get from point
"A" (where you are now) to
point "B" (your Goals, or where you want to be). The
broker's job is to help you
locate "A" and "B," to offer you a map on
how to get there, and to
stick with you to make sure you get where you want to be. The
investments are simply a
vehicle to transport you between the two points. If you don't
know where you are or where
you want to be, and have no idea how to get from one point to
another, it doesn't matter
whether the vehicle is a Porsche or a Yugo. In either case, you
will only arrive at point
"B" by luck, if at all.
Some people don't see the value in a broker's services, or
are prepared to do all the
work themselves. Those people are better off with a discount
broker. A full-service broker
offers very little to someone who is committed to spending the
time and energy necessary
to navigate their own way. Unfortunately, what I see all too
often are investors who
wander around aimlessly, never knowing where they are going,
simply because they think
they can pick a better vehicle than a broker can. The
interesting thing is that I came to
that realization, not while I was a full-service broker, but
after I had worked at a
discount brokerage firm and saw it first hand.
