Finance b0y!

Some people prefer to use and pay for the services of a broker because they feel more comfortable making decisions about their finances with the interactive guidance of a licensed professional.

When using a discount stock broker for financial guidance, one must be made aware that they do get paid on a commission, based on the stock/mutual fund they sell, and also through Class Distinction/Operating Expense Fees/Services Fees/Shareholder Fees. Thus, a conflict of interest arises concerning a stock broker who offers his/her service as a financial planner, because their revenue is generated as a direct result of your investment in the stock/mutual fund that they broker to you. Thus your return on investment may not be as great, and the advice they give you might not be in your best interest. However, some mutual funds and stocks can only be purchased through a broker: in such cases their services are required to purchase the financial instrument in question.

A word of warning: If you receive a call offering you shares at what seems an unfeasibly good deal (e.g., an imminent IPO which will cause the price to ‘go through the roof’), then you are probably being contacted by a boiler room. These are typically not registered with the FSA and could be in a foreign country where fraud laws are lax. If you suspect that you have been contacted in this way, see Boiler room for more information.