At just about the time I published “How to Choose an Online Broker,” Money Coach Bill Stanley gave some advice on how to pick the right stock broker:
Stanley says the first question to ask yourself is: “Do I want a place to visit in my town or am I comfortable with dealing with people on an 800 number?”
If you want a real person, Stanley recommends Scottrade, a deep discount broker with two local offices. Stanley uses the 800 number firms of E*Trade and TD Ameritrade. Mutual fund companies like Vanguard and T. Rowe Price also have brokerage accounts.
Additional tips:
* Research several firms before you decide
* Send for information
* Review Web sites
* Call and ask questions. You must be comfortable with the firm and you must be sure the firm will not pressure you to buy specific products.
This is all very good advice – especially the discussion the question of customer service via 800-number (and Internet obviously) vs. a local office. However, I’ll add three points:
1) Make sure you actually have a local office near you - Charles Schwab (SCHW) has more than 300 branches nationwide – but is one available to you?
2) $10 to $15 is a lot for a stock or ETF trade – You should only pay that much if you need a firm with branch offices. Companies like TradeKing and OptionsXpress are much cheaper.
3) Calling and Asking Questions Is Not Enough – This is smart advice, but remember that within a lot of companies, the sales force is more responsive than the customer service people. So while you should ask questions, also ask friends and even online strangers about their experiences with various firms.