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HighTower Advisors has created a great video comparing investment brokers with fiduciaries.

A broker is someone who takes a fee in exchange for executing a transaction. They provide a service in return for compensation. For the most part, a broker is not a fiduciary. However, brokers – depending on where they reside, professional qualifications, company, regulatory oversight, etc. – may have certain duties of care to their clients.

A fiduciary is someone with a legal duty of care to the client. It is more than simply executing transactions. More as if the fiduciary steps into your shoes to try and best meet your needs.

It is an important distinction. Make certain that you always know whether you are dealing with a fiduciary or not. I am not saying never to deal with a non-fiduciary. Only that you know the difference between the two. And, if appropriate, take steps to safeguard your best interests over those of your representative (agent, banker, broker, financial planner, etc.).

Now to the HighTower video. 

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What Advisors May Not Mention

On 11/29/2010, in Financial Advisors, by Jordan Wilson

This Reader’s Digest article does a good job summarizing some key things to remember when dealing with people in the financial services industry.

Reader’s Digest adds a few more thoughts in this separate article.

Many of the points we have discussed previously.

A few quick comments from my side:

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Choosing an Online Broker – Part I

On 08/12/2010, in Investments, by Jordan Wilson

For most investors, I believe using an online brokerage firm is the best way to invest.

Online brokers provide the most cost-effective means to invest and the services provided should meet the needs of almost all individuals.

In researching candidates to take your money, you have many choices.

At times, it is difficult to compare options. There are numerous special offers for new clients. There are also preferential pricing and services dependent on your trading activity level, your amount of assets, the trading platform you choose, etc. And many twists to the prices and services are buried in the fine print.

All this serves to (intentionally) make comparisons a challenge.

Today I will look at a few initial considerations when comparing firms. In my examples, I am using current data from each broker’s US website unless otherwise stated.

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Ways to Acquire Shares

On 08/09/2010, in Equities, by Jordan Wilson

Most investors trade in shares of individual companies.

The main method for small investors (i.e. you and me) is to buy and sell shares on the open market through the use of a brokerage account.

However, you can invest in public companies using other means as well.

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Brokerage Firms

On 02/08/2010, in Investment Concepts, Investment Strategies, by Jordan Wilson

With few exceptions, if you wish to buy or sell publicly traded investments, you will need an agent to do so on your behalf.

That agent is a brokerage firm.

Brokerage houses fall into two broad categories; full service or discount. In both cases, you will pay a service charge, known as a commission, to the agent when buying or selling investments.

Which is right for you?

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