Picking a Good Stock Broker Is Vital. Don’t Get Madoffed!

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Ask around. Ask people at your church, synagogue, golf club, even at work.

Call a few of the recommended brokers. Get a feel for how they are likely to do business with you. If they are short with you, and act like they would be doing you a favor by taking you on as a client, move on.

Ideally the broker should be happy to talk with you and be up front in every way.

Don’t get into philosophy or fees at this point. That is for the in-person interview.

Set an in-person interview with a minimum of 3 different brokers at three different brokerage houses. You want to get a sense of the differences between brokers and shops. This is especially important if you have never had a broker before.

At the interview pay attention to how the broker acts.

Does he/she greet you at the door? Does he/she offer you something to drink? Where does he/she sit during the interview. A good broker will sit next to you versus conducting the conversation over a desk.(An old and grizzled broker friend of mine beat this into my head.)

Does he/she listen to you? Does he/she look you in the eye?

Does he/she explain how he or she is paid if asked. Do you understand their answer?

Ask the broker what is most important to them.(Not most important in relation to you the client but generally, in life.) This is a good interview tool for everyone you do business with. It’ll give you a pretty good vibe off the person.

If the answer seems disingenuous take that into account. If it seems canned take this also into account.

Ask about investment philosophy. Make sure it works generally with your approach to things.

If the broker uses a lot of jargon move on. He/she should be able to articulate his/her philosophy easily and in relatively simple terms.

If all seems good, and if you feel you can work with the broker, thank them for their time and tell them you will call them back one way or the other after you have done your interviews and come to your decision. Don’t forget to call back after you have made your choice. It’s just common courtesy.

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·                              Good brokers can be new to the business but be careful. However, what you may lose in experience with a relatively new broker you may make up in terms of personalized attention.

·                              The stock market is no joke as anyone who has been in the market for any period of time will tell you. You can lose money, but the name of the game is to make money, and that can be done.

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