Strategic Management

1. Determine how much and what type of service

you want from your brokerage fi rm and stockbroker.

A full-service fi rm will off er investment

advice, make recommendations, and off er

research support. A discount broker typically

charges less than a full service fi rm,

but doesn't make recommendations about

buying or selling a specifi c security.

2. Research your brokerage fi rm and stockbroker.

Stockbrokers must be registered with each

state in which they regularly conduct business,

and licensed through the Financial

Industry Regulatory Authority (FINRA).

Call the Maryland Securities Division,

410-576-6494, to verify the fi rm's and the

stockbroker's registration and to check for a

complete disciplinary history. You may also

check BrokerCheck on the web at www.

fi nra.org/InvestorInformation/Investor-

Protection for some information, but not

necessarily all adverse information, on fi rms

and their stockbrokers.

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Ask for and check references from several

clients. Ask these clients how much better

off they are as a result of the services of the

stockbroker.

Don't make a decision about a brokerage fi rm

or stockbroker based solely on a telephone

solicitation, advertisement, or seminar.

3. Ask about fees and commissions.

Most brokers earn commissions when they

buy and sell investments on behalf of their

clients. Make sure you understand these costs

before opening an account.

Many brokerage fi rms charge ongoing fees

related to the maintenance of your account.

Make sure you understand these fees and how

they are charged to your account.

4. Determine your investment needs and objectives

such as short term profi ts, long term growth, steady

income, and tax savings.

Make your goals clear to your broker, preferably

in writing.

Your investment goals should be accurately reflfl

ected on your new account form. Check the

form and get a copy for your records.

If your investment goals

change, be sure that your

broker's records and your

records accurately refl ect your

revised objectives.

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200 St. Paul Place • Baltimore, MD 21202 • 410-576-6360

www.oag.state.md.us/Securities

How to Choose a Stock Broker

Investor Education Securities Division, Maryland Attorney General's Office

5. Determine your tolerance for risk.

Your new account form requires that you

specify the level of risk you are willing to

take to achieve your fi nancial objectives. If

you