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Broking on the line

I am starting to get involved in buying shares and wonder if I should use a broker or do it online. I am concerned about recent reports that brokers can lead clients astray and encourage them to invest simply to get more fees. What is your view?

I think there’s a good reason to have a healthy scepticism when it comes to all advisers. You have to make sure they’re representing your interests first and foremost and, if they are, then that’s a service worth paying for.

For the beginner it can be an educational experience to work with a stockbroker to understand what you get for the one per cent they will often charge you. In the age of email, you can get a lot of good information and analysis on stocks that could help your decisions to buy and sell stocks. Also there’s a different quality of information from broker to broker, as well as different quality of service.

Given what you pay for online broking, there can be a big saving doing it yourself but you do have to do your homework and follow up. At times when I want to buy something in a hurry, when I am busy, I will use a broker to make sure the trade gets done but other times the online option is appropriate.

I believe you have to understand what the value adds are from your broker and if they look like value for money, then they can be a good deal.

Also a broker can have access to IPOs and can get clients access to allocations that smight be better than what the general public has access to. This can be an added plus from working with a broker but make sure you never let them pressure you and if they do, contact the manager of the firm ahead of thinking about using another broker.

For advice you can trust book a complimentary first appointment with Switzer Financial Services today.

Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.

Published on: Thursday, October 07, 2010

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