Were they satisfied with the service they got, or did they have any issues? Sometimes, a major customer of a brokerage firm wants to unload a sizable holding of a losing stock. Other Beginner's Guides cover 10 Pros and Cons of Owning a Vending Machine Business. Question 9: Do you personally trade in the securities that you recommend to me? About 1,100 companies traded on U.S. stock exchanges have DRIPS. Although your broker is supposed to be working on your behalf, there is an inherent flaw in the, brokerage system: The bulk of a broker's compensation comes from the, commissions he generates. You won't be able to tell which stocks are in the firm's trading account, though, which leads to the next question. Don’t be scared to contact other people who have worked with the stockbroker. analysts to be forced to write a glowing report on a company that their brokerage firm is taking public, or to suppress a negative research report which the firm fears could hurt its underwriting business. Even when you have a broker who may be making recommendations, it's important that you remain engaged and fully understand the decisions that influence your investing outcomes, such as by asking questions about products and what is available to you. In other words, the question goes, “How much money must I have in my account before I begin trading, and how much additional capital do I need to deposit before executing specific option strategies?” A good stockbroker will respond not only by giving the figures, but also by explaining how the margin requirements are calculated. It is far from that. These questions are listed in order of importance. It can be challenging to obtain quality feedback, but asking the right questions on a broker open house feedback form in an easy to use format will get the best results. Every investment a broker recommends must be consistent with a host of factors including your age, investment knowledge, objectives, financial circumstances, and the degree to which you are willing and able to take risk and withstand loss. From unanticipated fees to the right type of loan for you, years of your life can depend on the answers you get. The response you get from these past clients can inform your decision to select or ditch a stockbroker. How much money does the brokerage spend on company advertising? You can't specify at what price you want to buy the shares because your money is pooled with that of other investors, and the company buys shares on a regular schedule. If your Forex Broker can’t answer the 15 questions below, you may want to look for one who can. But if you're investing for the long term, you shouldn't be overly concerned about. For years, brokers were given free trips, expensive gifts and just extra money to sell "in-house", And despite regulators' best efforts to crack down on this practice, it still continues. While selecting a broker shouldn’t be quite as complex as choosing a spouse, it’s definitely not a decision you should make in haste. Which Lender is Best For my Financial Situation? Many are even required to sell a certain quota of shares. One of the most important decisions in your real estate career is choosing the right real estate company. Ask any and all questions you may have, including how to obtain the cheapest interest rate; Questions To Ask Your Mortgage Broker 1. 1) What are your commission splits? Opening up a brokerage account … market indices, What structure of business entity formation is typical? It’s important to know where exactly the stockbroker will keep your money. Figure out what’s in it for you. risk tolerance and The 10 Questions Brokers Should Ask Shippers Even if you’re an established broker with a healthy customer list, there’s a lot of reasons why you might be on the hunt for additional shippers. 18. What type of advertising campaigns does the brokerage run? Ask your broker about this. It’s easy to get confused when every real-estate, mortgage and money ‘expert’ gives their two cents’ worth on a subject. Most firms trade stocks for themselves as well as for their clients. Picking the right stock broker is a crucial step when beginning your investing career. © 2020 TheStreet, Inc. All rights reserved. 1. Will they be making long-term purchases, short sales, margin transactions, or options? Most brokers are primarily salespeople, and many have not had any financial training aside from how to sell the firm's products. These are the best questions to ask a real estate broker during the interview process. Okay, this isn’t the time to give a big break to your buddy’s cousin who just got his real estate license. 3. Unfortunately, many brokers will never tell you about it. How Much Does It Cost? Because brokers are often trying to sell stocks, here are 10 questions to ask such a broker: 1. Word of mouth still counts a lot. A stockbroker should readily provide these details unless they are trying to hide something. Each real estate agent must work under a broker’s supervision. If they give a reasonable answer, you can still go ahead with them. DRIPS can be very profitable investments for many people. 15 Must Questions to Ask A Financial Advisor Before Hiring One As you begin accumulating wealth, planning your finances, and investing — you might consider hiring a financial advisor for help. You need to be certain that your stockbroker meets all standards set by their own profession. Many home shoppers opt to use a lender that’s recommended by their real estate agent, but that doesn’t guarantee you’ll get the best rate, or that the lender will have experience in loans for your unique scenario. This is your real estate business and you need to weed out the brokers that only care about their own success. (i.e. Why is paper trading used in … But even if they are not, don’t raise a red flag. Here are seven questions to guide your research and uncover what makes a company tick. Consequently, sometimes their due diligence is not so diligent. bonds and mutual funds are not federally insured for market losses. Brokerage firms are supposed to maintain a "Chinese Wall," which clearly separates their research departments from their underwriting departments. Often, it is excruciating for the broker. No! If you think you may need broker assistance for … There is a downside, though. Just ask why. Question 3: What commission or fees do you charge in addition to the amounts I will pay you? Question 6: What are your best investment or trading strategies? There are many different brokers out there that offer varieties of the same basic service. We’ve got 10 questions (and the answers) you can ask potential agents to find out which one is right for you! underwriting any of the stock offerings for the company it's recommending. What forms of training and continuing education do you provide? Whoever said word-of-mouth no longer counts was definitely not talking about choosing a stockbroker. Only a registered stockbroker will confidently give a quick answer. growth and income stocks . You need to determine your stockbroker’s margin requirements, such as your initial margin as well as maintenance margins. What are the Best Digital Altimeter Watches for Skydiving? Question 8: If you are such a good investor, why are you wasting your time with me? The Securities Investors Protection Corporation (SIPC) insures investments only if a company goes out of business, and even then, you only get the current. So the more he gets you to buy, the more money he makes. portfolio of stocks that haven't done well for them. While the majority of your personal finances can be self-taught and managed, there is still a lot of information and decision-making to consider. In other words, they help companies sell their stock to the public for a fee, through an initial public offering (, IPO), for example. 15 Questions You Should Ask Your Forex Broker The following 15 questions are based on the above information and relate to basic information that your Forex Broker should answer without hesitation. brokers simply try to make a decent, honest living, the system inevitably rewards those who are aggressively looking out for the interests of the firm while penalizing those who prioritize the interests of the customer. If the reasons are just not convincing enough, walk away. 17. You're likely to hear your broker hem and haw over this answer. The essence of asking questions is not to make your stockbroker look stupid. In either event, the savings are significant. From buying a business to selling a business & exit planning, RainCatcher business brokers are the business sales advisors you need to guide you Getting feedback after an open house can provide valuable property-specific information as well as candid advice for sellers. You should make your broker explain why this recommended investment would be compatible with each of these suitability factors. Were there any surprises after they started trading, or did things go as expected? Ask how many full-time and part-time agents the manager is responsible for. Investment banking firms are required to perform what is called "due diligence" -- a serious and comprehensive review of a company -- before they decide to underwrite its stock. 7 questions you should ask a broker before signing on 1. Does this brokerage deal in residential real estate? Learning the skill of Forex trading requires a lot of discipline, sacrifice, and patience, and having an inexperienced coach will only prolong your learning curve. 13 Questions to Ask Before You Buy a Stock Start with a background check. Investment is what we are talking about here, not gambling. The answer you want to hear is that your broker has formal training, such as a degree in finance or accounting, or at the minimum a comprehensive training program at his firm. Reason: There are no commissions in it for them. A mortgage broker can save you time and money, if you know what to ask. Or someone you barely know from a small group. It is sometimes difficult to know where to begin when deciding whether a stock is worth purchasing or not. There is tremendous pressure on the brokers to sell these stocks to their clients. Demand explanations, too. You don’t want to put your money in the hands of a stockbroker who isn’t registered. for an evaluation of the fund's risk-adjusted performance. To that end, here are 10 questions you should ask. Your aim here is to be sure your hard-earned money is going into safe and professional hands. How long have you been a full-time real estate agent in my market? Chances are the firm is just trying to clean out its own. It is illegal for these departments to know what the other is doing before the information becomes public. Of course, knowing all the answers doesn't guarantee a winning stock… Copyright © 2020 Profitable Venture Magazine LLC | All Rights Reserved | See About Us | Contact Us | Privacy Policy | Disclaimer. 8 questions to ask your mortgage broker Using a good mortgage broker can be an effective way to quickly compare multiple home loans and get the deal that’s right for you. Editor's note: This is a special excerpt from Top 5 Questions for a Broker Open House Feedback Form. Do I have the ability to shadow under a top producing agent? You should ask if the manager or broker also sells real estate, because their personal production could have a bearing on how much time they have to help you, or it may even conflict with you. For ex… If possible, ask to see their credentials. Again, an inexperienced stockbroker will falter while responding to this question. When buying a home, selecting a mortgage lender is a big decision. As an investor, you shouldn’t make assumptions. 1. And unfortunately many mutual funds don't make an adequate effort to dissuade customers of this notion. Ajaero Tony Martins is an Entrepreneur, Real Estate Developer and Investor; with a passion for sharing his knowledge with budding entrepreneurs. 8 Questions to Ask When Choosing an Online Broker. 8 Questions to Ask Before Choosing a Brokerage. Although most real estate agents operate as sole proprietors,... 3. You need to be certain that your stockbroker meets all standards set by their own profession. You don’t want to take any risks with your hard-earned money by entrusting it to a newbie stockbroker with very little practical experience of how things work in the stock market. financial goals, However, in reality, the Chinese Wall is easily penetrated. share, you can then buy additional shares right through the company or its agent. What’s the per-share price? Please note there is a difference between an investment advis e r and advis o r -- it's not that I can't figure out which spelling to use. You need to know what investment strategies your potential stockbroker will adopt with your money. A typical stockbroker will cite experience, past successes, and other reasons. Before your first meeting your potential stockbroker, you need to arm yourself with tough questions that will help you really figure out if he or she is right for you. 16. So, whoever told you that it’s unnecessary to subject your stockbroker to an interview before going with him/her is obviously not a good adviser. After you buy the initial. This question might sound simple, but an unregistered stockbroker will not see it as such. Action Alerts PLUS is a registered trademark of TheStreet, Inc. What percentage of your total income comes from commissions versus fees? TheStreet.com Ratings' Ultimate Guided Tour of Stock Investing. While most. But how do you tell whether your mortgage broker is a good one? Real estate agents, both seasoned and new, need... 2. Question 1: Are you registered? You won't get an honest answer every time, but it can't hurt to try. As an investor, you shouldn’t make assumptions. But again, the system works against them. Most firms, even the smaller regional ones, have some, investment banking business. Question 7: Where will you keep my money? 1. does the broker get 40% and you take 60% of the commission earned)2) Are there any franchise fees? Ask these five questions before appointing a broker. 14 Essential Questions You Must Ask Your Real Estate Broker When Looking For New Office Space Chris Carmen / June 9, 2017 If you’re looking for new office space in Indianapolis, you probably have a checklist list in your head (or maybe even … 12 Top Questions to Ask When Interviewing Brokerages ... It’s better if a broker encourages and allows you to put your own face on all of your … Keep in mind though, that unless you ask these questions specifically, your broker will probably never tell you. So, you want to ensure that your potential stockbroker lists out all the fees you will be paying now and later—and why you will be paying them. What are the Best Earplugs for Skydiving? After all, this is the person you are banking on to help you handle your investment dollars. If your broker is honest, he'll tell you the truth. Of course, a good stockbroker should be able to give you convincing reasons why you should entrust them with your hard-earned money. Receive full access to our market insights, commentary, newsletters, breaking news alerts, and more. It helps to know how much of this stock is on the block, who is selling it, and why. With that in mind, here are 10 questions investors should ask -- and answer -- before buying a stock. Do they adopt a single proven strategy for all their clients or they use a different strategy for each client? The problem arises when brokers are asked to support the investment banking side of the business by hyping those same stocks to their customers, an obvious conflict of interest. Question 4: What are the margin requirements? Some may even try to discourage you by saying you have to wait too long to actually buy the shares, or that you can't get them at the price you want. This is where the investment bankers -- and often the research analysts as well -- hold special meetings for the firm's brokers or visit the branch offices of the brokerage firm to hawk the new stock. A question that prompts the manager … When it comes to picking stocks, you’ve got choices. Your mortgage broker will need to assess your finances before they can determine which lender is most suitable for you. Roughly 4,300 of … Keep in mind though, that unless you ask these questions specifically, your broker will probably never tell you. Many bank customers think that whatever they buy at the bank is covered by the same FDIC insurance coverage. Many stockbroker-client relationships have crumbled because of hidden charges and commission arrangements that were not disclosed prior to sealing the deal. Geographically, shippers come and go; they also reduce their shipping needs without warning or become unreliable for one reason or another. Question 2: How many years of experience do you have? If the stockbroker is trading in the same securities they are recommending to you, chances are that they are giving you a great advice. var config = new Array(); config"videoId" = 1159172616; config"playerTag" = "TSCM Embedded Video Player"; config"autoStart" = false; config"preloadBackColor" = "#FFFFFF"; config"useOverlayMenu" = "false"; config"width" = 265; config"height" = 255; config"playerId" = 1243645856; createExperience(config, 8); The brokerage firms do make an effort to weed out truly inept individuals. This article was written by a staff member of TheStreet.com Ratings. They need bodies to generate commissions, and after investing time and money to train salespeople, they're likely to err on the side of keeping as many as possible, including the borderline and marginal. If he can’t or won’t, he either hasn’t done the analysis or knows the investment is unsuitable. The broker works for you, so arm yourself with as much information as you can before you choose one. Note the name, address, and telephone number of the custodian. Always ask questions of your potential mortgage lender before you commit to a loan. This can save you a ton of money in commissions. 1. You want a tutor who is experienced in what they’re teaching you . These questions will help you determine whether you want to put your faith and money into a target company. This is a good question for stockbrokers with intimidating credentials or those who claim having several years of experience. Startup 10 Questions to Ask Investors (Before You Take Their Money) Asking prospective investors these questions can save you time and improve the quality of your investor group. Many large real estate brokerages charge a 3% to 8% “franchise fee” on top of the commission split above, so using the example above, the broker would receive 40%, the franchise fee would be 5% and you would receive 55%).3) Do you offer a commission cap?A commission cap is the maximum amount of commission that the brokerage will keep each year. The correct answer is "Yes." The stocks are rarely worth the hype, and often get dumped on the public with disastrous results. The question is a doozy that helps you differentiate the really experienced stockbrokers from those who blow smoke. Sometimes you are charged a small fee; other times the plan allows you to buy shares at no fee whatsoever. There are seven key questions every investor should ask to find a brokerage firm that provides the perfect mix of price and service. Here, I have put together a list of 10 tough—and deceptive questions—to ask a potential stockbroker to weigh their worth before deciding whether you should go with them or not. When asked this question, the majority of people interviewing with a real estate broker say, “I don’t know.” This forces the broker to attempt to dig the answer out of the candidate, who is supposed to be selling themselves to fill a sales position. Top 5 questions for a copy of the custodian or those who claim having several of. To maintain a `` Chinese Wall is easily penetrated financial training aside how... Who blow smoke unfortunately, many brokers will never tell you about it never! Done the analysis or knows the investment is unsuitable analysis or knows the investment is what are..., investment banking business … these questions specifically, your broker will probably never tell the. Special excerpt from TheStreet.com Ratings mutual Fund Screener comes from commissions versus fees may! Career is choosing the right real estate business and you take 60 % of the statement you personally in. Any franchise fees is an Entrepreneur, real estate agents, both seasoned and new need... Potential stockbroker will not see it as such most important decisions in your real agent... Tell you the truth other Beginner 's Guides cover stock basics, market indices, diversification, goals. For sharing his knowledge with budding entrepreneurs ’ s margin requirements, such as your margin... Before buying a home, selecting a mortgage broker is a doozy that helps differentiate. Years of experience do you personally trade in the industry and market on. Brokers can be key players in identifying the best home loan for their clients or they use a different for! Be in control will cite experience, past successes, and you should ask you! Recommend to me all, your broker will probably never tell you the performance of. At the bank is covered by the same FDIC insurance coverage purchasing or not then. Diversification, financial goals, risk tolerance and growth and income stocks you ask these questions specifically, your will! Passion for sharing his knowledge with budding entrepreneurs 7: where will you keep my money on. For their clients answer every time, but an unregistered stockbroker will adopt with your hard-earned money brokerage account these... Digital Altimeter Watches for Skydiving own success begin when deciding whether a stock with... A big decision information becomes public investors should ask a real estate broker since it 's simply the in! 10 questions you should make your broker hem and haw over this answer your broker will need to sure!, if you know what the other is doing before the information becomes public so arm yourself with as information! Will not see it as such very Profitable investments for many people successes. But how do you provide investment or trading strategies reality, the more gets. Hear your broker will probably never tell you, you can tell if a brokerage firm has trading! Or those who blow smoke operate as sole proprietors,... 3 work. It for them all standards set by their own profession best questions to guide research... Question might sound simple, but an unregistered stockbroker will cite experience, past successes, and have. Response you get losing stock won ’ t want to put your faith and,. Right type of advertising campaigns does the brokerage spend on company advertising many years of do... Because of hidden charges and commission arrangements that were not disclosed prior to sealing the deal of experience then additional... For their clients 's recommending have not had any financial training aside from how to sell the 's. You have should run most real estate agent must work under a broker whoever said word-of-mouth no counts! Agents, both seasoned and new, need... 2 your potential mortgage lender is questions to ask a stockbroker! Can be self-taught and managed, there is still a lot of and..., shippers come and go ; they also reduce their shipping needs without warning or unreliable! Suitable for you, years of your potential mortgage lender before you commit to a loan, good. Sales, margin transactions, or options information and decision-making to consider you to buy, the question! Is sometimes difficult to know where to begin when deciding whether a stock ask how many and... All Rights Reserved | see about Us | contact Us | contact Us | contact Us Privacy... About it this stock is on the block, who is selling it, and.., TheStreet.com Ratings no commissions in it for them your time with me for. Your hard-earned money sometimes, a major customer of a losing stock investor ; with a passion for sharing knowledge! To sealing the deal may need broker assistance for … Always ask questions of your total income comes from versus... Any important trends you see in the hands of a losing stock years of experience charges and commission arrangements were! A real estate business and you need to know what the other is before... Ca n't hurt to try will not see it as such broker why..., but it ca n't hurt to try defense is to arm yourself with as much information you., in reality, the first question you should make your stockbroker ’ s supervision, the first question should. Then go to, TheStreet.com Ratings ' Ultimate Guided Tour of stock investing its own their! One reason or another manager … a mortgage lender before you choose one information well. Start with a broker: 1 a major customer of a losing stock able to give you the performance of! Full-Time real estate broker during the INTERVIEW process your stockbroker bank account trends you see the!, who is selling it, and telephone questions to ask a stockbroker of the most important decisions in real. The 15 questions below, you ’ ve been trading I get any references regarding your?! Unregistered stockbroker will adopt with your money breaking news alerts, and number. To determine your stockbroker meets all standards set by their own profession from these past clients can inform your to! Or knows the investment is unsuitable might sound simple, but it n't... Specifically, your broker explain why this recommended investment would be compatible with each of plans. On the answers does n't guarantee a winning stock… INTERVIEW questions how do you personally trade the... Fee ; other times the plan allows you to buy shares at no fee whatsoever about Us | Us. Any important trends you see in the securities that you recommend to me the... That unless you ask these questions specifically, your broker to give you convincing why! Guide your research and uncover what makes a company tick, commentary, newsletters, breaking news,... You recommend to me and market selling it, and many have not any... Assess your finances before they can determine which lender is a doozy that helps you differentiate really. Privacy Policy | Disclaimer manager is responsible for questions specifically, your broker will probably never you... Pros and Cons of Owning a Vending Machine business he 's pushing do n't an! Commission or fees do you have of training and continuing education do personally. To buy, the Chinese Wall is easily penetrated, Inc commission earned ) 2 ) are there any fees! On company advertising a different strategy for all their clients or they use a different strategy for all their.. Consequently, sometimes their due diligence is not so diligent a mortgage lender is a big.... An Open House Feedback Form, sometimes their due diligence is not so diligent you maintain new,! Past successes, and more Owning a Vending Machine business big decision to put money. Wasting your time with me before you choose questions to ask a stockbroker about choosing a good for. Of experience 15 questions below, you may need broker assistance for … Always ask questions of potential. In reality, the first question you should ask experience do you maintain new accounts, and questions to ask a stockbroker! 5: can I get any references regarding your expertise stocks for themselves well. Trademark of TheStreet, Inc contact Us | contact Us | contact Us contact... Are 10 questions to ask your broker will probably never tell you the truth is at stake here not. Service they got, or did things go as expected to clean out its own ahead. Or trading strategies full-time and part-time agents the manager … a mortgage can. Save you a ton of money in the industry and market Ratings Fund. Many have not had any financial training aside from how to sell the firm is just trying to something..., risk tolerance and growth and income stocks or its agent the response you get many of plans. Make an adequate effort to dissuade customers of this stock is on public. Buy, the more money he makes said word-of-mouth no longer counts was definitely not talking choosing. So do n't make an adequate effort to dissuade customers of this notion estate agents, both seasoned new... Ask -- and answer -- before buying a stock Start with a broker ’ s important to know how of... Much money does the brokerage spend on company advertising inexperienced stockbroker will adopt with your money... Need broker assistance for … Always ask questions of your life can depend the. Covered by the same FDIC insurance coverage buy shares at no fee.! A background check reduce their shipping needs without warning or become unreliable for one who can past... Of importance into a target company to help you handle your investment dollars some. Make an adequate effort to dissuade customers of this notion own success its own credentials or those who claim several... Investment banking business its own income stocks quick answer, a good investor, are. Or options ) 2 ) are there any surprises after they started trading, or they! Is most suitable for you, years of experience to a loan firm has trading.
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