Firing your full-service broker
Talk about a revolution! Not too long ago I blogged about articles in USA Today and Barron’s covering the trend of investors firing their full-service brokers. Now The Atlantic features another major article on this movement. “Why I Fired My Broker” by Jeffrey Goldberg is a fascinating account of how the reporter, like countless other investors these days, wised up to the fact that full-service brokers are largely servicing themselves, not their clients.
(Thanks to my father-in-law Bill Koyle, who brought the article to my attention via The Financial Post of Canada. Reporter Jonathan Chevreau echoes Goldberg’s personal experiences and notes that the fire-your-broker trend is big north of the U.S. border, too.)
I’ll spoil the punch line and tell you the ending: Goldberg doesn’t really fire his broker at all -- he just can’t get his calls answered. Having provided lackluster advice for a high price that torpedoed Goldberg’s savings in the crisis, his full-service broker is now too busy chasing richer clients for fee-based management to deal with Goldberg’s modest account anymore. Amazing.
I’ve said it before, and I’ll say it again: little investment accounts can and often do grow larger over time. At TradeKing we’re all about supporting that growth and helping self-directed investors manage their own money more successfully.
You’re undoubtedly more motivated than some advisor to maximize the returns on your assets, right? Active investing may not suit everyone’s temperament, but for those who are so inclined, we would LOVE to support their independent success – at considerably less cost. Give us a try!
[image: from The Atlantic website]
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Comments
Follow commentscorbinb2 posted May 06, 2009 (08:58AM)
Nothing ticks me off more than when people treat you like your money, and thereby you, are not important to them. With the growing number of scandals and the poor management of these large companies and the ever-increasing government interventions right now, people just feel safer knowing they are in control of their money.It can be scary to realize that there is no-one to blame but yourself when things go wrong, but at least you can do something about your mistakes directly which is actually quite reassuring and hardly ever the case with a third parties mistakes. The current volatility and news driven market has also helped a lot of would be stock pickers to think they are way better than any broker, which is not always the case either. Self-Directed means exactly that. You need to take responsibility for your own education as well when it comes to your investments and trading. Don't be afraid to ask questions. It is far better to ask the same questions over and over until you understand, then to not ask and let one mistake wipe you out.
No it is not for everyone, either due to time constraints, frame of mind or just overall intestinal fortitude, but it can be quite rewarding and freeing at the same time if approached properly. After learning that my wife's retirement fund would be paying the grand sum of 4% return, I had the aha moment many of us with accounts here have had and said I can do better than that.
bigdog posted May 06, 2009 (10:40AM)
Amen to all of that, Corbinb2! Couldn't have said it better myself. (Also, nice job working in the phrase "intestinal fortitude" - that's definitely required for active trading, from time to time.)
TheMechanic posted May 08, 2009 (04:21AM)
It's hard to believe Goldberg's broker wouldn't return his calls. His article is often quite funny, like when visiting the survivalist, always buying at the peak, and so forth. It would be hilarious, except his life savings is at stake. Thanks for the links bigdog.driver posted May 08, 2009 (05:07PM)
just starting self directed trading so far so good plus im having a great time. could not be happier with the help from the staff. Im sure ill be here pulling my hair out sometimes but at least i feel more in control than ever beforebigdog posted May 11, 2009 (10:27AM)
Glad you enjoyed the post, TM - and very glad to hear you're enjoying your TradeKing experience, driver! I agree, Goldberg's story is hilarious, but I'm sure it didn't feel funny at the time to be ignored during the biggest market drop in a generation. We try to put ourselves in our clients' shoes and always remember how much trust they've placed in us by keeping their money here. You guys deserve nothing less!You must Log In to post to this blog.
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