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My stock broker is raping me!

Discussion in 'Other Off Topic Forum' started by PeterS, Dec 22, 2003.

  1. PeterS

    PeterS Three Time F1 World Champ
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    Jan 24, 2003
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    I called my stock broker that I have my IRA funds in. I asked to trigger a sell of all of my stocks. I want to sit on the sidelines through the holidays just in case there may be 'events' that 'tank' the market for 3-10 days. Here is an example of the cost of one sell: Cisco: 300 shares: $161.00 transaction fee! This is NUTS!

    With these charges, I would like to roll my IRA into another broker that won't bend me over when I want to restructure my funds. Any suggestions?
     
  2. rob lay

    rob lay Administrator
    Staff Member Admin Owner Miami 2018

    Dec 1, 2000
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    The only reason to have a broker is for advice, why would anyone not actually trade through an online service? I've been with etrade since 1997.
     
  3. racedecknc

    racedecknc Karting

    Nov 24, 2003
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    Ed
    Nobody will do as good a job of watching your money as you will.

    Ed
     
  4. SRT Mike

    SRT Mike Two Time F1 World Champ

    Oct 31, 2003
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    I remember a friend of mine doing a trade on Conmerse and paying ~$300 for it back around 1994.

    The days of greedy brokers are over. Use an online trading service. You should be able to take control of your IRA. Mine is through Fidelity and I dont pay such outrageous fees as you listed.

    Thing is - broker advice can be helpful, but how do you know your broker is really good? Usually the really good ones aren't managing small timers like most of us. A friend of mine has about $15MM+ in the market most of the time. I remember I was at his house once and he was getting ready to sell his Dell stock - to the tune of quite a few $MM. The guy just had to lift the phone and one of the most senior guys at a big trading house was right there at his beck and call.
     
  5. PeterS

    PeterS Three Time F1 World Champ
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    Jan 24, 2003
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    My flipp'en ten year old can give me better advice than my broker (i.e.: THEY SAY NOTHING). You ask for some direction and all you get is answers that goes nowhere. No offense to a professional broker, but how do they serve me? If I go to a hardware store for advice on a roof product, they will do their best to direct me to a product that will keep me out of trouble. Is that not what a broker should be doing? The hell with these people!
     
  6. kenny

    kenny Formula Junior

    Nov 9, 2003
    376
    Greenwich , CT
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    Kenny
    Mike-


    A) A good broker not servicing small timers is so untrue.. a good broker will work with an individual who cooperates and understands what investing and markets is really about and understands risk tolerance... Chances are a client who is well versed in this knowledge is rich himself, but there are small timers out there as well..


    B) Sorry to say, but No senior guy at a big trading house would bother with a retail broker over the tune of a $1mm trade, especially a big company like DELL, that is chump change...

    C) $15 million in the market at any given time is a very small amount for a good broker unless this guy does nothing but buy and sell individual stocks... Good brokers build long term relationships, and are not constantly buying a selling racking up $300 + commission per trade passed on to the client...

    Good brokers are like portfolio managers, they diversify a client's money and put it into mutual funds, treasuries, and other instruments which is why many of them have quite a bit under asset management... How many people do you know are worth $10 million liquid, and call up a broker saying they have $1 million in play money to buy and sell individual stocks.. Very Very few... Most are looking for a nest egg to either have retirement money, with some play money mixed in..

    Good brokers are like a two way street... They try to halfway look out for your best interest, and halfway look out for their bottom line...

    The best ones have imagination with investing ideas, and know how to maximize commissions as well as generating a healthy risk tolerant return for the customer that consistently beats their competition...
     
  7. kenny

    kenny Formula Junior

    Nov 9, 2003
    376
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    Kenny
    Dude,

    that's the most retarded analogy I've ever heard...

    "Pick your financial planner more carefully then your doctors. If the doctor screws up your wife will be set for life"

    Your doctor screws up your health, you might not have a life to go back to...
     
  8. PaulC

    PaulC Formula 3

    Feb 11, 2003
    1,394
    San Antonio, TX
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    Paul
    That commission is nothing than a CYA fee you pay incase something goes wrong. I have been in the brokerage business for 8 years, and I agree that you pay too much, but most people are not willing to take responsibility for their actions. That commission gives you the right to hold the broker and brokerage firm accountable if things are not done how you requested. If you want advice, hire a investment consultant and trade online. If you want somebody to blame in case of a problem, find a broker. Good luck. Feel free to email me if you have any questions.
     
  9. Hubert888

    Hubert888 F1 Veteran
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    May 14, 2003
    5,377
    Manhattan & LA
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    Hubert
    RULE OF THUMB:

    NEVER USE A FULL SERVICE RETAIL STOCK BROKER!! (ie. Merrill, Goldman...etc)

    They rape you on commissions and stockbrokers do not know SH*T! All they are, are puppets for their analysts. The analysts tell them what to buy and sell.

    If you make your own trading decisions, go to Schwab or something.
     
  10. FLATOUTRACING

    FLATOUTRACING F1 Rookie

    Aug 20, 2001
    2,684
    East Coast
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    Jon K.
    Short on time but in a nutshell, brokers are salespeople. Some brokers who have been around for quite some time are very knowledgeable about the market and it's investments, but many more are nothing but salesman being told what to push.

    I have worked in this industry since early 1995 and the bottom line in firms hiring brokers has to do with your sales skills nothing more.

    I graduated undergrad with a minor in finance and 20 hours of economics. When I went on my first interview at a local brokerage they didn't give a rat's *s about any of that. They told me to go sell cars or real estate for a year and then come back.

    Lastly, not knowing everything about your IRA, I do question your brokers willingness to let you just sell everything. If you hadn't made your 2003 contribution you could have bought index options/puts or a decent futures contract on anything from interest rates/oil/S&P/US$/... for a lot cheaper than selling your stocks and then having to rebuy them. Shorting would have been another option. There are a million differnet hedging strategies you could use assuming your IRA is big enough to offset the transaction costs. You can trade options some places for $25 a round turn.

    A broker who simply says ok.......we will sell everything isn't doing his job. I undestand your concern about an attack or something on the same scale but selling everything isn't a good investment strategy unless you are nearing retirement age and have a substantial sum you want to preserve.

    Just my 2 cents worth.

    Regards,

    Jon P. Kofod
    1995 F355 Challenge #23 (for sale)
    www.flatoutracing.net
     
  11. kenny

    kenny Formula Junior

    Nov 9, 2003
    376
    Greenwich , CT
    Full Name:
    Kenny
    Jon-

    That's a grim picture, but true at many brokerage firms.... The movie "Boiler Room" paints a good picture of what goes on in some of these sweat shops...

    Stockbrokers are like car salesmen.... They get a bad rap... But as we all know, there are decent salesmen out there (maybe only a few), or else nobody on this board would be asking advice who to trust buying a Ferrari..... We'd treat every car salesman as if we were dealing with the Auto Toy Store in FL...
     
  12. atheyg

    atheyg Guest

    About 7 years ago I was interested in becoming a Broker, I talked
    with several firms Merril Lynch etc, I explained my interest in Technical Analysis and how I invested much money and time in learning it. The branch managers I talked to were amused but told me they wanted
    salesmen not technicians to pump their stocks they made markets in.

    I am sure some good brokers that care exist but they are rare, you are better off making your own decisions and analysis if you have the time, the big boys that invest millions get the inside tips from the real players and market makers, the small guy is at a disadvantage and is the last to know anything.
     

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