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Raymond Hodge wrote:
>
> Hi Norm
>
> Appreciate your excellent posts.
>
> We are very interested in any and all broker recommendations
> or comments you might care to share.
>
> We are in the procees of looking for a new broker now,
> and my partner thinks that we should go full service for better
> fills and more assistance
> (cancel one order if another gets filled, etc.).
>
> Sounds like a waste of money to me, but what do I know.
>
> What do you all think, Full-Serv or Discount????
> Thank you, Ray Hodge
>
If I can stick my nose in here. If you want to go "full service" for
more assistance, fine, but I hope everyone here understands that
THE LEVEL OF COMMISSIONS YOU PAY IS UNRELATED TO THE QUALITY OF FILLS.
I think alot of people mistakenly think they are related because brokers
who charge alot say that. To get more "good" fills than bad, you need a
good PIT broker. FUll service firm absolutely do not necessarily have
the best pit brokers. There are some very bad filling brokers working
for some reputable firms because they either cut their commission or
are more willing to pay for their errors or they are drinking buddies
with the desk clerks. Also, brokerages can claim to have great brokers,
but many excellent brokers live off their reputation and take alot of
time off and give their decks to back-up brokers who are not as good.
It just takes experience with a brokerage to see what type of fills you
get, but in my opinion, it is more important to find a brokerage who
will go to bat for you when you do get a bad fill.
I don't necessarily think you have to go "full service" to get that and
other assistance. But if you do go to a full service firm, negotiate
your commission rates. When I was a broker at Dean Witter our standard
rate was $45, but I had discretion to go as low as $15 if I wanted a
client and one broker in the office had a client paying only $9. So
always negotiate.
Good Luck,
Eric
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