Brokers or Other Investment Consultants Can Make You Money.

Brokers or Other Investment Consultants Can Make You Money.

The best brokers in the business are not the ones who make their clients the most money; they are the ones who do the most trades. The fact is, brokerage firms don’t even measure a broker’s profitability per customer. If management of brokerage firms doesn’t hold brokers accountable for their customer’s account, there is no motivation to make money for their customers. Your broker is in no way qualified to manage a portfolio or pick stocks. If these guys were so good, they would be millionaires themselves and not still working for someone else.
Investment banking for brokerage firms brings in loads of money. By putting favorable analysts’ ratings on companies that bring in offerings and secondary offerings, the brokerage firm collects a percentage of each deal. Analysts work very closely with investment bankers and will put a favorable rating on any stock that has ties to the company.
Of course, with every rule there is an exception, and there are some good brokers out there. We are not here to bash brokers, just stating the facts that we think investors should be aware of. We apologize if we have offended anyone, but professional investors know we are right.