Should You Be Using A Discretionary Management Stockbroker?
Summary: If you are an investor of substantial means, you might be looking for a high level of service from a brokerage. For those with portfolios above US$100,000 to invest, discretionary management stockbrokers can be an excellent route to a personalised managed investment portfolio.
Imagine having a stockbroker dedicated to your personal needs and working to fulfill your financial needs all without you lifting a finger. That's exactly what you get with a discretionary management stockbroker.
This is by far the premiere service you can purchase from a stockbroker. You get together for a few meetings, discuss your dreams for your money. You talk about what risks you are willing to take and how comfortable you are with different options. You basically draw up guidelines for your stockbroker to follow.
After that, the stockbroker takes those guidelines and runs with them. He or she looks at the numbers, researches stocks and contemplates the trends. Best of all, he or she actually makes it happen. The relationship is based on trust and there will be no calls to get consent before moving money around. You don't miss a window of opportunity because you were unavailable or too busy with work to deal with your stocks.
What Are Today's Top 50 Trending Stocks? Free List Available Here
Plus, you don't have the anxiety of making that decision. You can have all the knowledge in the world and if you don't know how to make it work for you, it is worthless. You can have your stockbroker telling you about a great situation and miss it because you were slow to action.
That's why a discretionary management stockbroker is so amazing! He takes all the guesswork out of the equation.
You make decisions when they are best for you, at the beginning. With the help of a trusted advisor you can look at your risks intelligently, not emotionally. Later on, when the broker is on the phone trying to get your consent to move your money, you are under the wire. That's when emotions can ruin your portfolio.
It's pretty easy to see why many people choose to go with a discretionary management stockbroker. It's a way to let the professionals do their job and allow you to sit back focus on other things.
And you are always welcome to chime in. This is a premier service, if you have questions or concerns the stockbroker should be available for anything you need. If you decide to dip into the business section one day and are wondering why you don't own a certain stock, just ask your broker. He will let you know why that stock does or doesn't fit into your overall guidelines.
However, if like most people you would rather not be committed to thinking about your stocks everyday, discretionary management is the better way to go. This is the most expensive, but the most effective way to do business with a stockbroker.
Such a service will usually cost an annual management fee of around 1%, but possibly as high as 2% of the funds under management. Then, of course, each trade will be charged in the same way as any other buy or sell transaction.
If you had a friend or relative as a stockbroker, this is likely the arrangement you would have with them. Wouldn't you like your stockbroker to treat you the same way?
Stockbrokers - The Right Firm For You?
What Does A Stockbroker Do?
Should You Be Using An Internet Stockbroker?
Should You Be Using A Low Cost Stockbroker?
Should You Be Using An Advisory Management Stockbroker?
What Are Typical Stock Market Transaction Costs?