Even the most knowledgeable investor needs help from an investment professional sometimes, even if that professional just handles a stock purchase. This booklet provides the information you need to find and work with reputable brokers and financial advisers.

Table of Contents
© 2005 by The Kiplinger Washington Editors, Inc. All rights reserved.

1 Choosing & Using a Broker
1 Full-Service Brokers
3 Discount Brokers
3 Online Brokers
4 Opening Your Account
5 Records You Should Keep
5 How to Deal With Your Broker
6 Problems With Your Broker
9 What a Financial Adviser Can Do for You
9 How to Pick an Adviser
10 What to Ask an Adviser
10 Protect Your Money: How to Check Out a Broker or Adviser
Glossary of Investment Terms You Should Know

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Choosing & Using a Broker | 1

Even the most knowledgeable investor needs help from someone sometimes, even if that’s just someone to handle a stock purchase.

This booklet provides the information you need to find and work with reputable brokers and financial advisers. We’ll tell you the kind of help you can get from brokers—full-service, discount and online—and financial advisers and investment clubs. And we’ll arm you with information that will help you spot early warning signs of broker misconduct and what you can do about it.

Choosing & Using a Broker

Before you’re ready to choose a stock broker, you’ll have to do a little thinking about what kind of investor you are and how you like to operate. Consider your investing style. Which of these statements best describes you?

You like to talk things over, weigh all the angles, check every source of information you can before you make a decision. You are a good candidate for a full-service broker.

You have no trouble making decisions on your own, you prefer to do your own research and don’t want to pay someone to do it for you. A discount broker could work for you.

You fit the second description, and you use the Internet a lot to shop and track down information. You’d probably be happiest with an online broker.

Whatever type of broker you decide to work with, be sure to check the firm out for its reputation and reliability. Advisers who deal in securities must be registered with the U.S. Securities and Exchange Commission (SEC) and/or the State Securities Regulator as investment advisers (see page 10). ...

About the Investor Protection Trust:

The Investor Protection Trust (IPT) is a nonprofit organization devoted to investor education. Over half of all Americans are now invested in the securities markets, making investor education and protection vitally important. Since 1993 the Investor Protection Trust has worked with the States and at the national level to provide the independent, objective investor education needed by all Americans to make informed investment decisions. The Investor Protection Trust strives to keep all Americans on the right money track.

For additional information on the IPT, visit www.investorprotection.org.

Visit Investor Education Booklets Website

The following investor education booklets are available for free from DFI, in partnership with Kiplinger's Personal Finance magazine, the Investor Protection Trust and the American Library Association.

The booklets can be viewed online in PDF format* or you may order a booklet and have it mailed to you free of charge.

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