Brokerage Firms and What to Expect from Their Services –PillarWM

Wealthy investors require access to global markets to identify potential investment opportunities. Brokers are experts in giving investment advice and trading securities in the right market. The brokerage firm industry is highly competitive, with many low-cost, online brokerage firms becoming more common. Promotions and incentives can make offers seem alluring, but you need to be sure who you trust your wealth with. To help investors with more than 10 million dollars in liquid assets, we wrote a guide to help you find the best financial advisor, i.e., The Ultimate Guide to Choosing the Best Financial Advisor for Families worth $5 Million to $500 Million.

STRATEGIES FOR FAMILIES WORTH $5 MILLION TO $500 MILLION

7 Secrets To High Net Worth Investment Management, Estate, Tax and Financial Planning

The insights you’ll discover from our published book will help you integrate a variety of wealth management tools with financial planning, providing guidance for your future security alongside complex financial strategies, so your human and financial capital will both flourish.

Clients frequently share with us how the knowledge gained from this book helped provide them tremendous clarity, shattering industry-pitched ideologies, while offering insight and direction in making such important financial decisions.

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Pillar Wealth Management is a fee-only wealth management firm that offers an array of services, including asset allocation, portfolio management, and investment management. We have extensive experience in helping investors with $5 million to $500 million in liquid assets achieve their financial goals. Call us to schedule your first consultation with an expert from our team.

With the numerous types of financial advisors out there, you might want to know how brokers differ from the rest. In this article, we will discuss what a brokerage firm is, what they can do for you, and when do you need brokerage firms.

Table of Contents
What are Brokerage Firms? What Does a Brokerage Firm Do? Do You Need the Services of a Brokerage Firm? How To Approach a Brokerage Firm Brokerage Firms vs. Wealth Management Firms

What are Brokerage Firms?

A brokerage firm is a financial institution that handles assets. They employ stockbrokers who research various markets to represent and advise investors who trade in public stocks and bonds. In simple terms, brokerage firms help you sell and purchase securities. Generally, they charge you per buy or sell order. You can make your buys and sales through in-person consultations, telephones, via the internet, or through a smartphone.

Brokers and brokerage firms provide different services. The broker type depends on whether you consider to purchase mutual funds. Captive brokers work for firms that own part of a mutual fund company. This ownership connection encourages them to sell their firm’s mutual funds as opposed to any other company’s. It is clear that this might cause a conflict of interest. After all, as a wealthy investor, you want your financial advisor to be working in your best interest, not their firm’s.

The second type of brokers would be independent brokers. They are not bound to a brokerage firm, nor do they own a captive mutual fund company. They are more likely to give you impartial advice since they are not under the influence of another financial institution. Our wealth managers are fiduciaries, which means that they are legally obligated to make your financial health their priority. You can learn more about how we can help you with our array of wealth management services by contacting our team.

Types of Brokerage Firms

When it comes to brokerage firms, there are four main types which we will discuss briefly. Knowing the types can help you make a wiser decision should you choose to hire one. We will talk more about how to find a good brokerage firm in the following sections. Meanwhile, if you would like to learn more about selecting the best financial advisor for yourself, you can read our guide: The Ultimate Guide to Choosing the Best Financial Advisor for Families worth $5 Million to $500 Million.

Full-Service Brokerage Firm

A full-service brokerage firm generally includes a complete range of tools, research methods, and advice to help you trade your assets and invest your money in a way that earns you the highest rewards at minimal risk. It does mean that they charge more than other firms for those services.

Discount-Service Brokerage Firm

A discount-service broker does not offer all the services as a full-service broker, which means they charge less too. They only perform the trading portion of your investment management.

Deep-Discount Brokerage Firm

Deep-discount brokers specialize in one area, making them less expensive. They trade your assets but charge you a considerably low fee.

Online-Discount Brokers

This category charges even less than deep-discount brokers since they only give advice for online trading. Although fast and cheap, online-discount brokers do not give you the level of personalization that you need.

At Pillar Wealth Management, we recognize that wealthy investors have different needs than the average investor. That is why our wealth management services also entail investment management to help you improve your portfolio’s performance. You can read our Performance Guide, “Improving Portfolio Performance: The Shifts Multi-Millionaires Must Make to Achieve Financial Security and Serenity,” to learn more.

What Does a Brokerage Firm Do?

When working with any financial institution or financial advisor, it is best to have a clear idea of what to expect from them. If you’re an ultra-high net worth investor with over 10 million in liquid assets, choosing the right firm or advisor is crucial for your financial security. You want to be sure that you hire the best of the best. But, how can you know which is the right one? To learn more, we suggest that you read our guide,The Ultimate Guide to Choosing the Best Financial Advisor for Families worth $5 Million to $500 Million.

If you’re asking yourself, “What should I expect to hire a brokerage firm?” you might want to know what brokerage firms actually do.

A broker or a brokerage firm deals in various securities to suggest the best deals to their clients. They can advise when to buy or sell a certain stock. They handle trades by receiving and exchanging orders. However, this does not make them registered investment advisors. They simply act as the middleman to connect the buyer to the seller.

In any transaction, they try to get the best price for their clients while extracting a commission fee for their services. The services offered differ with the type of brokerage firm you work with.

Working with a Full-Service Brokerage Firm

A full-service firm will give you ongoing support and advice. These are preferred by high net worth and ultra-high net worth individuals as a more complex portfolio requires more attention and vigilance. With up-to-date stock quotes, extensive market analysis, and research on economic conditions, they give you expert advice.

A full-service brokerage firm also provides money management, tax management, estate planning, and financial consultation services. These aspects contribute to your financial health. Moreover, these firms hire highly trained and certified professional brokers and financial advisors. This allows you to form a personal client-broker relationship with them. They aim to understand your goals and objectives and adjust your investment portfolio to meet them.You can read our 5 Shifts Guide for maximizing portfolio growth strategies to learn more.

Do You Need the Services of a Brokerage Firm?

Investing can be tricky. It requires you to know the market and economy inside out and be able to derive conclusions from daily price movements about which stock is trading up or trading down.

So, when do you need brokerage firms? If you’ve recently entered the world of investing, you might be overwhelmed. Even understanding the complicated jargon can take a while!

As an affluent investor, you have other things on your mind, and you benefit more from hiring a professional to handle your assets. A brokerage firm has the resources and tools to research, analyze and recommend the best investment opportunities that suit your investment profile.

Numerous high-value assets can be difficult to keep track of on your own. A broker can monitor your individual investments and keep you updated on their performance. If you want to adjust your financial goals, a broker can help you achieve that by rebalancing your portfolio and suggesting alternative investment strategies.

However, it is worthwhile to note that not all brokers are necessarily the right fit for you. It might take you a couple of tries to find one that is compatible with your values. You might end up deciding to work with multiple financial advisors, such as an investment manager, financial planner, and stockbroker. Alternatively, you could approach a wealth manager to avail of these services in one place.You can get in touch with our team of expert wealth managers to learn exactly how we can improve your financial life.

How To Approach a Brokerage Firm

Brokerage firms form a partnership with you. Like with any partnership, you want to make sure that you’re working with the right people who know what they’re doing. Investing with the right partner by your side can help you effectively navigate a complicated and volatile global market.

So, the question on your mind might be, “How do I meet a brokerage firm that will help me achieve my goals?”

Before you work with any brokerage firm, you should make it a rule of thumb to understand their revenue model. Do they charge commissions to process customer trades? Does their execution cost fit your budget? Do they charge additional fees or taxes? The tools and services offered at a brokerage firm will affect their fee. If you do not look into these matters beforehand, you could end up losing a big chunk of the profits you generated from your investments.

Make a list of potential brokerage firms you want to work with. You can look these up online or ask for recommendations from colleagues with a similar financial background to yours. You can narrow down the prospects by studying their website for credentials, services, and online trading facilities. For example, in-house and third-party market research might be a service that you want.

In any case, it is best to make sure that the brokerage firm you choose does not have any regulatory issues or suspension notices. These could be an indication of operational oversights or offenses in their practice. As a high net worth or ultra-high net worth individual, it is imperative that you protect your assets. We talk about unforeseen threats and liabilities in our book,The Art of Protecting Ultra-High Net Worth Portfolios and Estates – Strategies For Families Worth $25 Million To $500 Million.

Brokerage Firms vs. Wealth Management Firms

As a rich investor, you have likely heard the term ‘wealth management.’ This might lead you to wonder when do you need brokerage firms and when do you need wealth management firms?

Simply put, brokerage firms help you with investment management. Some firms can offer other services such as estate planning or tax management, but their specialization remains managing investments and handling your assets. Wealth management firms give you an array of services covered by a single management fee. This includes retirement planning, estate planning, tax mitigation, financial planning, risk management, and more. They work exclusively with affluent investors, making them well-equipped to handle high-value assets.

Pillar Wealth Management offers fiduciary, fee-only wealth management services to investors with $5 million to $500 million in investable assets. We study your financial profile to help you create a customized plan for your financial objectives. Our wealth managers can guide you with unbiased advice in various financial aspects. You can schedule your first free consultation with one of our expert wealth managers today.

Authors

Hutch Ashoo

Chris Snyder

To be 100% transparent, we published this page to help filter through the mass influx of prospects, who come to us through our website and referrals, to gain only a handful of the right types of new clients who wish to engage us.

We enjoy working with high net worth and ultra-high net worth investors and families who want what we call financial serenity – the feeling that comes when you know your finances and the lifestyle you desire have been secured for life, and that you don’t have to do any of the work to manage and maintain it because you hired a trusted advisor to take care of everything.

You see, our goal is to only accept 17 new clients this year. Clients who have from $5 million to $500 million in liquid investable assets to entrust us with on a 100% fee basis. No commissions and no products for sale.