Basics Beginner: Broker Services

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1.
A full-service brokers commission is based on the total value of holdings in the customers account.
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False. Commissions are fees levied on each transaction the broker processes for the customer.
2.
A brokerage may be able to offer checking and credit cards.
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True. Brokerage firms can offer asset management accounts that combine broker services with banking services such as checking and credit cards.
3.
You will make more money using a full-service broker because of their knowledge and expertise than you would by going it alone.
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False. While brokers may have more financial education and expertise, they are not clairvoyant. You have as good a chance at making money investing by doing your own homework carefully.
4.
All of the following are good reasons to use a full-service broker, except _______.
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The guarantee of higher returns. This is not something a full-service broker can offer (though he or she can offer the other options).
5.
Which of these investment strategies might be best executed by a discount broker?
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Buying and holding balanced mutual fund shares. A relatively uncomplicated and low-risk strategy, such as buying and holding mutual fund shares, may not require the advice of a full-service broker. With more aggressive and complicated strategies, the average investor should seek professional advice.