Stock Brokers for Beginners

So you've made the decision to start investing in stocks, money is burning a hole in your wallet, and you're itching to get started.  In your mind's eye, you see a version of you dressed in a power suit elbowing your way through a room filled with financial types waving your fists in the air and shouting to "sell, sell, sell!"

Before you dash off to Wall Street, take a few more minutes here in front of your computer (dressed in your pjs and bunny slippers), and consider the types of stock brokers out there who can assist you with your leap into the world of investing in stocks.

They want how much?

Take heart.  Buying stocks with the assistance of a broker does not have to cost your life savings plus your first born; there are stock brokers out there who are a good fit for the budget-minded.  Often referred to as discount or online brokers, these brokers often fill a basic order-taking function over the internet.  They'll usually provide minimal assistance and little to no guidance on what to buy, but their costs are typically per transaction and overall pretty low.  Plus, using the internet, transactions can be made almost instantly with the click of a mouse.  Keep in mind, you'll have to do some research about which stocks you'd like to buy.  This might be a good way to go if you're looking to get your feet wet in buying stocks without throwing a lot of money around. 

But I need some one-on-one time

Traditional stock brokers, or full-service stock brokers, can give you this.  Often, they're available to sit down with you and review your personal situation, taking into consideration factors such as marital status, income, debts, age, and so on.  They can give you guidance based on their expertise on what stocks might be a good purchase for you, and ultimately can help form a personalized financial plan. 

If you like them and want them to stick around for the long haul, usually they are happy to oblige.  Of course, this will come with a heftier price tag than the point-and-click variety of brokers described above.  However, the additional costs may be worth it for you if you value someone working with and for you regarding your best financial interests.

Another important trend to mention: as online investing and big-name brokerages become more and more prevalent, people are turning to financial planners more than experts who deal solely in stocks. Financial planners are an expanded version of a full-service broker, and can talk you through all sorts of investments, helping you to diversify your portfolio in a way that makes sense for you.

How to decide

So if you want to decide which kind of broker or planner makes the most sense for you, you can do a little experiment. Imagine it's time to make your investment and see if you have a solid idea of what you'd do. Write down what you'd buy and how much. If you don't feel confident to make these decisions, then you might want to consider a full-service broker or financial planner.

Remember, full-service brokers do not always have their interests aligned with yours. So even if you use one for now, it makes sense to keep learning and researching so that you can make these decisions on your own.

Photo Source: JMRosenfeld