How Do I Choose a Stock Broker? The Seminar

stock broker seminarThis article is Part 3 of a 4 part series.  While many things have changed or evolved in the securities industry, how you obtain a stock broker has remained relatively unchanged.

Usually, you get a broker in one of four ways:

1. through a Referral

2. responding to a Cold Call

3. attending a Seminar

4. a member of an Affinity Group

Remember, when choosing a broker, by whatever method, look for someone who understands you and your specific needs, whom you can understand and not feel intimidated by and who will answer your questions in writing versus talking over the phone. None of this will guarantee a good relationship, but using this methodology will increase your chances for success.

Attending a Seminar

More and more stock brokers are using seminars as a way to find new clients. The invitation is almost always couched in terms of giving you information or education, but at the end of the day the brokers who put on these seminars are there to sell you a product or an investment plan of some sort, something that will generate a commission or fee for them.

Ads are run in the local paper or mailers are sent a week or two before the date of the seminar, asking for people to call the office to make a reservation. The seminar is held at a hotel or restaurant, with or after dinner. They usually last for forty-five minutes to an hour-and-a half, during which time the stock broker or a speaker will go over the features and benefits of the product or service he is selling. The broker’s goal is to convince you to set up a one-on-one meeting in their office/your home. They rarely close a sale at the seminar.

You feel comfortable going to the seminar because after all it is being given especially for you and your fellow co-workers. It may have been advertised on the break room wall, or you received a handwritten invitation. There is no cost or obligation, and you are assured that no one will try to sell you anything. The people giving the seminar are ‘Investment Professionals’, or at least that is what all the firm’s advertising and all the fancy titles and initials after their names would have you believe.

As a method of deciding on whom to invest your money with, attending a seminar is only a step, and a small one at that, above responding to a cold call.  As with a cold call, a seminar is a numbers game for the stock broker and a shot in the dark for you. You may feel comfortable that you are surrounded by people like you, and that you are in a nice place, possibly being fed a nice meal, but none of those are good reasons to choose this person to entrust your life savings.

To learn more about Richard Lewins, visit him at www.lewinslaw.com.

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