What's Your Style?
Deciding whether you need full-service or discount is your first step. The choice is up to you, but taking charge of your own portfolio can be a very rewarding and profitable experience.
On the other hand, full-service brokers also have their time and place. Although you'll pay more, losing money on commissions is better than wiping out your portfolio because you don't understand the market. The bottom line is that the type of broker you choose should be based on your individual needs.
Check the Background
The next step is to check the background of the firm and/or broker for any past disciplinary problems.
Securities regulators have made this information relatively accessible through the Central Registration Depository (CRD), a disciplinary and employment database available from NASD Regulation. You can perform online searches on the NASDR website for certain information and request that a detailed report be sent to you.
You can also ask your state securities regulator to provide you with information from the CRD. The North American Securities Administrators Association website has info on how to get in touch with state regulators.
We apologize to visitors from outside the United States. This information is U.S. specific. We suggest you contact regulators in your home country for information on how to check the background of brokers.
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