Investment Services Offered by Broker-Dealers

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Investment Services Offered by Broker-Dealers

Broker-dealers offer investors a wide variety of investment services. Some firms offer the full panoply while others offer fewer in varying degrees.

Things To Know

  • Full-service broker-dealers do much more than just trade for you.

Full-service brokers go beyond simply processing trades to help you determine potentially successful investments and help manage your portfolio:

Investment planning

An account representative can review your investment goals and help you put together an investment plan that will help you meet them. Then your broker can suggest specific kinds of securities you need in your portfolio to pursue your investment plan.

Research on specific investments

Brokers have ready access to a wide range of information about specific securities, the advice of industry analysts, and information about market and economic trends as a whole.

Suggesting good investments

Brokers are typically always on the lookout for investment opportunities that are right for their clients.

Monitoring performance

Brokers can monitor the performance of specific investments and your entire portfolio. They also keep apprised of market trends and can advise you on whether or not the time is right to sell one of your holdings.

Limited tax advice

While brokers are not experts on all tax matters, if your goal is to shelter your investment income from taxes, brokers can suggest instruments that will help meet your needs. Brokers can also set up customized tax-deferred retirement accounts for you.

Margin accounts

If you want to engage in margin trading (purchasing securities with only a partial payment), your broker can set up a margin account for you.

Asset management accounts

Brokerage firms (along with banks and other savings institutions) can set up an account that combines broker services such as securities trading with banking services like checking and credit cards. All of your transactions are reported in monthly statements.

Access to IPOs

Access to attractive initial public offerings of stocks can be hard for individual investors to come by. Brokers who are representatives of an IPO underwriting firm can offer their customers an opportunity to get in on the ground floor of a new stock offering.

Some firms may offer more services depending upon the nature of their business. You can also find many services offered through other financial institutions.