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What can I expect from my broker?



 
 
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  #1  
Old July 12th 03, 06:26 AM
Tony Wright
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Posts: n/a
Default What can I expect from my broker?

I opened an account with a full service broker 6 months ago. Up to that time
I didn't even know what brokers did.
I am now wondering if I am getting the kind of service I can expect.
My only contact is with his junior associates. They are nice enough,
intelligent (young) people but not very pro-active in terms of giving me
advice. The broker himself never contacts me, in fact I was the one who
arranged our first meeting when the accounts were opened.
It seems they exist to execute trades but I thought they were supposed to be
financial advisors.
Perhaps I have a unrealistic Hollywood image of a wise, father image who
looks after my interests. In practice I seem to be the one who is doing
research and making suggestions.
I have opened an E-trade account to get the feel of what it is like to do my
own trading and am tempted to switch everything to E-trade. I am a bit
hesitant however about flying solo with limited experience.
What are other people's experience with brokers?

Thanks
Tony


  #2  
Old July 12th 03, 10:32 AM
mark freedman
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Posts: n/a
Default

"Tony Wright" wrote in message m...

I opened an account with a full service broker 6 months ago.


Unless you have a large amount or do a lot of trading,
you aren't likely to get much attention. Count your blessings.

You'll miss out on self-serving bad advice, self-serving
"mistakes" when transactions are executed, self-serving
mis-information about simple things like "on what date
must I stop using my Midland-Walwyn cheques?"

I hope you didn't open an account with the idiots
at CIBC Wood Gundy (who took over Midland-Walwyn). :-(


I am now wondering if I am getting the kind of service I can expect.


Sounds like you're being ignored. which is a good thing
with most "full service" brokers. I know people paying steep
management fees to people who made the same mistakes (Nortel,
Bombardier) I made for myself, absolutely free.

When you initially met the broker, did you review situation,
goals, and risk tolerance, and discuss a strategy ? If so, you
might hope to be notified of new issues which might be of interest.

TD Waterhouse is constantly sending me Emails about IPO's.
Usually after they're already closed. What a tease :-)

A lot of the IPO's which are still open fall into the
"wouldn't touch with a ten-foot pole" category.

I thought they were supposed to be financial advisors.


There are certified financial planners and other variations,
people trained to review your entire situation and advise you
accordingly. Usual warnings about self-serving advice.

I seem to be the one who is doing research and making suggestions.


If you're near a decent library you can find
The Investment Reporter (mostly Canadian), Value Line
(mostly USA) and other investing newsletters. Of course,
they don't know your goals and situation. So once you establish
some kind of plan, including family obligations and tax situation,
you can use them to make investing decisions about particular
stocks. Money Reporter, MoneyLetter, and a few other newsletters
also cover Income Trusts, Bonds, Convertible Debentures, and other
financial instruments (I'll take three tubas, please).

GlobeInvestor and GlobeFund are useful free sites,
GlobeInvestor Gold is a subscription site with more research
and tools. Lots of stuff online, www.investorama.com used to
have links to many sites - haven't been for a while.


I have opened an E-trade account


Not familiar with E-trade. Vaguely recall some complaints
from people surprised that their securities were sold without
warning to cover margin requirements when share prices plummetted.
If you're doing anything fancy, buying on margin, selling short,
playing options, you may want the full-service broker to hold
your hand until you're more familiar with the procedures.

I use TD Waterhouse, they have some research reports (TD, S&P,
Argus), a section on fixed-income, IPO's, planning tools, and
links to bank accounts at TD Canada Trust.


tempted to switch everything to E-trade.


Perhaps see what E-trade offers in terms of research, planning,
service, and convenience (links to bank accounts and such).

The online discount brokers are reviewed every year (?)
by the Globe & Mail. OTTOMH I forget who came first this year.
I don't do enough trading to worry about saving $5 / trade.

Good luck. As Fox Mulder says, "Trust no one."


Disclaimer: Not a securities professional, all comments based
on my personal experience. YMMV.
  #3  
Old July 12th 03, 10:32 AM
mark freedman
external usenet poster
 
Posts: n/a
Default

"Tony Wright" wrote in message m...

I opened an account with a full service broker 6 months ago.


Unless you have a large amount or do a lot of trading,
you aren't likely to get much attention. Count your blessings.

You'll miss out on self-serving bad advice, self-serving
"mistakes" when transactions are executed, self-serving
mis-information about simple things like "on what date
must I stop using my Midland-Walwyn cheques?"

I hope you didn't open an account with the idiots
at CIBC Wood Gundy (who took over Midland-Walwyn). :-(


I am now wondering if I am getting the kind of service I can expect.


Sounds like you're being ignored. which is a good thing
with most "full service" brokers. I know people paying steep
management fees to people who made the same mistakes (Nortel,
Bombardier) I made for myself, absolutely free.

When you initially met the broker, did you review situation,
goals, and risk tolerance, and discuss a strategy ? If so, you
might hope to be notified of new issues which might be of interest.

TD Waterhouse is constantly sending me Emails about IPO's.
Usually after they're already closed. What a tease :-)

A lot of the IPO's which are still open fall into the
"wouldn't touch with a ten-foot pole" category.

I thought they were supposed to be financial advisors.


There are certified financial planners and other variations,
people trained to review your entire situation and advise you
accordingly. Usual warnings about self-serving advice.

I seem to be the one who is doing research and making suggestions.


If you're near a decent library you can find
The Investment Reporter (mostly Canadian), Value Line
(mostly USA) and other investing newsletters. Of course,
they don't know your goals and situation. So once you establish
some kind of plan, including family obligations and tax situation,
you can use them to make investing decisions about particular
stocks. Money Reporter, MoneyLetter, and a few other newsletters
also cover Income Trusts, Bonds, Convertible Debentures, and other
financial instruments (I'll take three tubas, please).

GlobeInvestor and GlobeFund are useful free sites,
GlobeInvestor Gold is a subscription site with more research
and tools. Lots of stuff online, www.investorama.com used to
have links to many sites - haven't been for a while.


I have opened an E-trade account


Not familiar with E-trade. Vaguely recall some complaints
from people surprised that their securities were sold without
warning to cover margin requirements when share prices plummetted.
If you're doing anything fancy, buying on margin, selling short,
playing options, you may want the full-service broker to hold
your hand until you're more familiar with the procedures.

I use TD Waterhouse, they have some research reports (TD, S&P,
Argus), a section on fixed-income, IPO's, planning tools, and
links to bank accounts at TD Canada Trust.


tempted to switch everything to E-trade.


Perhaps see what E-trade offers in terms of research, planning,
service, and convenience (links to bank accounts and such).

The online discount brokers are reviewed every year (?)
by the Globe & Mail. OTTOMH I forget who came first this year.
I don't do enough trading to worry about saving $5 / trade.

Good luck. As Fox Mulder says, "Trust no one."


Disclaimer: Not a securities professional, all comments based
on my personal experience. YMMV.
  #4  
Old July 12th 03, 01:06 PM
Mike Higgs
external usenet poster
 
Posts: n/a
Default

"Tony Wright" wrote in message
...

Tony,

I am now wondering if I am getting the kind of service I can expect.


You should expect good service. It all depends on what the initial
discussions were about. What did you ask for? What did he tell you? If
you're not getting what you ask for or what he said he would give you, then
you're getting bad service. If you are then, it's good service.

But that's not the real problem. It seems that you are looking for stock
advice. If that's the case, you are playing with fire because you don't seem
to have enough knowledge to assess the stock recommendations. To simply
place yourself blindly in the hands of your broker is highly risky; you have
to understand what he is telling you. Individual stock selection for the
vast majority of investors is a losing game even if a full service broker is
involved. The reasons are many: no clear investment objectives, insufficient
diversification, overtrading, poor stock selection, etc. Unless you really
know what you are doing, stay away from doing it yourself even if you
involve a full service broker. You'll be far better off going the mutual
fund route. And even that's not easy if you don't know what you are doing.
Relying on an advisor is highly risky unless you do some basic study first.
Understand what asset allocation is. Understand the historical returns
offered by different asset classes and their risks over time. Understand
what re-balancing is. Understand the impact of management fees. Understand
the differences between actively managed funds and index funds.

If you want to go the individual stock selection route, learn how to analyse
stocks and financial statements. Start with a copy of Graham & Dodd's
Security Analysis http://makeashorterlink.com/?S2E152E35. Then figure out
whether you are interested in growth or value investing. Subscribe to a
newsletter as a learning tool. Look at what they are recommending and then
analyse the stock to see if you agree with their reasoning. It's a long
learning process with no shortcuts and it requires a lot of discipline, time
and enthusiasm for the subject which the vast majority of investors do not
have.

Regards,
Mike

--
Email:




  #5  
Old July 12th 03, 01:06 PM
Mike Higgs
external usenet poster
 
Posts: n/a
Default

"Tony Wright" wrote in message
...

Tony,

I am now wondering if I am getting the kind of service I can expect.


You should expect good service. It all depends on what the initial
discussions were about. What did you ask for? What did he tell you? If
you're not getting what you ask for or what he said he would give you, then
you're getting bad service. If you are then, it's good service.

But that's not the real problem. It seems that you are looking for stock
advice. If that's the case, you are playing with fire because you don't seem
to have enough knowledge to assess the stock recommendations. To simply
place yourself blindly in the hands of your broker is highly risky; you have
to understand what he is telling you. Individual stock selection for the
vast majority of investors is a losing game even if a full service broker is
involved. The reasons are many: no clear investment objectives, insufficient
diversification, overtrading, poor stock selection, etc. Unless you really
know what you are doing, stay away from doing it yourself even if you
involve a full service broker. You'll be far better off going the mutual
fund route. And even that's not easy if you don't know what you are doing.
Relying on an advisor is highly risky unless you do some basic study first.
Understand what asset allocation is. Understand the historical returns
offered by different asset classes and their risks over time. Understand
what re-balancing is. Understand the impact of management fees. Understand
the differences between actively managed funds and index funds.

If you want to go the individual stock selection route, learn how to analyse
stocks and financial statements. Start with a copy of Graham & Dodd's
Security Analysis http://makeashorterlink.com/?S2E152E35. Then figure out
whether you are interested in growth or value investing. Subscribe to a
newsletter as a learning tool. Look at what they are recommending and then
analyse the stock to see if you agree with their reasoning. It's a long
learning process with no shortcuts and it requires a lot of discipline, time
and enthusiasm for the subject which the vast majority of investors do not
have.

Regards,
Mike

--
Email:




  #6  
Old July 12th 03, 02:06 PM
Nicole Wagner
external usenet poster
 
Posts: n/a
Default


I opened an account with a full service broker 6 months ago. Up to that time
I didn't even know what brokers did.


Troutman wrote about his first broker experiences.

http://TigerTradingClub.com/club_archiv/

Nicole

  #7  
Old July 12th 03, 02:06 PM
Nicole Wagner
external usenet poster
 
Posts: n/a
Default


I opened an account with a full service broker 6 months ago. Up to that time
I didn't even know what brokers did.


Troutman wrote about his first broker experiences.

http://TigerTradingClub.com/club_archiv/

Nicole

  #8  
Old July 12th 03, 02:28 PM
Mike Higgs
external usenet poster
 
Posts: n/a
Default

"Nicole Wagner" wrote in message
...

Troutman wrote about his first broker experiences.

Jon Matte, if that's who you are talking about, is a futures trader. Futures
are worlds away from stocks.

Regards,
Mike
--
Email:


  #9  
Old July 12th 03, 02:28 PM
Mike Higgs
external usenet poster
 
Posts: n/a
Default

"Nicole Wagner" wrote in message
...

Troutman wrote about his first broker experiences.

Jon Matte, if that's who you are talking about, is a futures trader. Futures
are worlds away from stocks.

Regards,
Mike
--
Email:


 




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