CFPs and other experts discuss Brokerage accounts

Reporter: Dawn Reiss

Publication: U.S. News & World Report


Deadline: May 21, 2017 7:00 pm

Working on a story walking readers through what a brokerage account is and how they need to be aware of fees, structure and other nuisances that aren’t always clear. Please response with answers via email. I will call to follow-up with questions. Please include your name, title, company name, city, state, contact phone and email. Please be as detailed as possible. What is a brokerage account? How does the arrangement work between an investor and a licensed broker? How does the process work if an investor opens and account and there is an introducing firm, which makes recommendations, takes and executes an investor’s orders but has an arrangement with a clearing and carrying firm, which is the one to finalize (“settle” or “clear”) your trades and hold your funds or securities. Please explain the process and how this works and if all firms have this or only certain accounts do this. How is this different from using a RIA? What questions should an investor ask before opening one? What fees, hidden and otherwise should they consider? What is the typical range of fees? What are commission rates, ranges? What other transaction/advisory fees are using added that investors need to be aware of? What types of accounts do/don’t have fees for not maintaining a minimum balance? What types of Account maintenance, account transfer, account inactivity, wire transfer fees or any other fees should
investors be aware of? How should investors decide if they want to do a cash account or margin loan account? What other types of accounts might investors be offered besides these two? How should investors manage their uninvested cash? How often should investors receive statements? Who typically controls the decision making for these accounts? What are cash sweep programs? What should investors ask about cash sweep programs? Are securities typically registered in the investor’s name or in the name of the firm? What is the difference between the two? What are the different features, including interest rates and federal insurance coverage investors should consider? What are the pros/cons (advantages/disadvantages) for getting bank deposits and/or money market funds of selecting one over the other? What trends are you seeing that investors should consider? What else haven’t I asked that is important?

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