Its 2014. Why do individual investors still use a broker or portfolio manager?

Discussion in 'Online Brokers' started by Alejandri, Nov 2, 2014.

  1. User911

    User911 Well-Known Member

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    I think for the "little guy" they mainly use a broker out of fear. I did this somewhat with my IRA and I'm not really happy with the brokerage firm I selected. They are reputable enough but I'm not really impressed with my returns. However, before I switch over and start doing my IRA completely on my own, I feel like I need to do more learning. I handle my stocks on my own, but for the long range, which is what I consider my IRA to be, I need to be EDUCATED.

    I was talking to a physical therapist and she says she pays her broker $100 a month! I thought that was outrageous. I don't think she meets with her broker more than once or twice a year. What a waste of money!
     
  2. owesem75

    owesem75 Well-Known Member

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    I think those who use brokers are either Big Investors who would like to let the broker do the research and all that... and the Small investors who needs guidance in investing. These days, there are option to investor to bypass the use of human broker as you can do transaction online.. you only pay the broker a small amount of commission (also) + some tax to cover their service fees (use of their platform). While it gives you the control on what to do with your money, but I think this is for those who knows what they are doing and why they are doing it...
     
  3. JR Ewing

    JR Ewing Super Moderator Staff Member

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    I'm guessing she probably has at least 6 figures in a "managed money" platform where she pays a flat % that is usually somewhere around 1% or so, give or take. She's probably very busy and probably makes a very good living doing what she is actually trained to do, and would probably spend whatever free time she has relaxing with friends and family instead of pouring over the markets for many hours a week trying to figure out how to best achieve her short term and long term financial goals.
     
  4. TipdOff

    TipdOff Well-Known Member

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    What do you mean by "online traders"? Just wondering. Have you heard of investing community TipdOff? Anyway, people with a lot of money to invest (500k+) will use an adviser to handle their money (as others here have already pointed out). In fact, most professional brokers/ financial advisers won't be much interested in helping someone who has only 10k or 20k to invest. Therefore, especially younger people will nowadays turn to online resources such as TipdOff to help each other navigate the markets rather than walk into a bank and actually talk to a "professional". Younger people also feel much more comfortable using online tools than older generations who simply didn't grow up using social media, online banking etc.
     
  5. queenbellevue

    queenbellevue Well-Known Member

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    I think for people with high net worths, it's not even worth their time to do all the research and stuff themselves. Also don't underestimate the power of habit, people who've been using brokers for a long time would be pretty reluctant to branch out on their own unless their broker was doing a horrible job
     
  6. JR Ewing

    JR Ewing Super Moderator Staff Member

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    I always tell people that if you've got a million and you're determined to do some unconventional things, be highly aggressive, or "do your own investing" or whatever, take maybe $50k of that million and "play" with it. If you've got $10 mil, you can maybe go up to half a mil or a full mil. If you lose some or all of that money, you've still got most of your money in the hands of a pro at a reputable institution - still enough to get by own with minimal overall damage to your wealth and lifestyle.
     
  7. fxstreet

    fxstreet Senior Investor

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    Same reason why you use an online broker. A broker is a negotiator and has more experience than you do. So, unless you are confident in your investing skills, use a broker.
     
  8. longtermbull

    longtermbull Administrator Staff Member

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    Horse for courses - some people have the time and knowledge to make their own decisions while others prefer to leave it to the "experts". If you find a broker who knows what they are doing then it can all turn out very well for everyone. That is the key, finding a decent broker in the sea of rubbish :)
     

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