The Magnanimous Broker

Provided By www.stockandbonds.org

The broker is, like the customer, a person. His customers range from millionaires, who may spend as much as $100,000 at a time, to the person with limited funds, whose largest transaction may total somewhere between $200 and $500.

He is called upon to handle all ages, both sexes, and a wide variety of both political and social viewpoints; he is expected to do this with patience, harmony, and understanding. He must be as much of a trusted official as an insurance agent, a real-estate broker, or a lawyer. He is both ready and anxious to give the best service within his power, including extensive and up-to-the-minute information; but there is one thing he cannot do—make customer decisions. He may give an opinion if it is requested, but the only way in which he is allowed to make decisions is for the customer to give him legal authorization to handle the account. Otherwise all final decisions must be made by the customer and when they are made in the form of an order to be executed, he will do his best to carry it out and at the most favorable price he is able to obtain. In case you so desire, you may ask that your broker keep your securities and even care for the crediting of dividends to the account.

The only way in which the broker can best serve is to obtain a full disclosure of financial status, which includes income, expenses, insurance, savings, and other investments, such as real property. This will enable him to judge the extent of the risk to be assumed; if he considers such a risk needs to be minimized, do not be surprised if he recommends bonds or high-grade preferred or public-utility commons and says flatly to avoid speculative oils and minerals like a plague. Remember, he has had the necessary experience to be in a position to help.

The selection of a broker is not difficult. Merely look in the financial pages of a news–paper or the telephone directory "yellow pages" and you will find many brokerage houses listed. Some even advertise in the pages of many of the current magazines. People sometimes feel somewhat embarrassed in making a selection and then going into a brokerage house to discuss their financial needs; but they should have it in mind that the brokerage house, like a bank and like an insurance agent, is there to serve.

Many of them are spending large amounts in advertising every year in order to tell the small investor that they are interested in him and seek his patronage. When entering such an office, all that it is necessary is to say "I wish to open an account," or "I wish to discuss possible investments through this house"; immediately a qualified representative will be assigned.

The size of your investment account does not have any bearing, since the small investor may, at some future date, become the large investor. Besides, many brokerage houses have at last come to realize that there are large numbers of potential investors of modest means; they know that these people are the best exponents of a capitalistic system, since they are capitalists, or they would not be able to invest. Indeed, as we have already remarked, there are now more than 122 million such people and their ranks are being increased by more and more each year. They are destroying the myth that stock investments are only for the few and wealthy, and they represent every part of our country and every occupation and every walk of life.

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