LAP: QS-048 Considerations in Selecting a Securities Sales Agent.
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Transcript of LAP: QS-048 Considerations in Selecting a Securities Sales Agent.
LAP: QS-048LAP: QS-048
Considerations in Selecting a Securities Sales AgentConsiderations in Selecting a Securities Sales Agent
ObjectivesObjectives
Describe securities sales agents.
Discuss considerations in selecting a securities sales agent.
• “Middlemen”• “Middlemen”• Your link to the stock exchange• Your link to the stock exchange• Brokerage houses
• Banks
• Work for:• Work for:
• Must be licensed• Must be licensed
• Salespeople• Salespeople
• Accounting firms
• Insurance agencies
• And more!
• Traditional
• Provide research and guidance
• Offer other financial services
• High commissions
• Full-service• Full-service
• Offer basic trading services
• No research or guidance
• Less expensive
• Do not solicit business
• Discount• Discount
• Ideal for self-directed investors
• 24-hour access
• Blurs line between full-service and discount
• Usually the cheapest
• Online• Online
Must be willing to explain pay structure
Get what you’re paying for
Must be willing to explain pay structure
Get what you’re paying for
Shop around!Shop around!Factors to consider:Factors to consider:
Proper licensing
Steady work history
Proper licensing
Steady work history
PricePrice
Education and experienceEducation and experience
Shoparound!
Shoparound!
Must provide a list of references
Long-time clients are best.
Must provide a list of references
Long-time clients are best.
Factors to consider:Factors to consider:
Easy to talk to
Lets you be in control
Offers a written agreement
Easy to talk to
Lets you be in control
Offers a written agreement
Satisfied customersSatisfied customers
Comfort levelComfort level
Running a Running a backback ground checkground check
Securities and Exchange Commission
Central Registration Depository
National Association of Securities Dealers
Securities and Exchange Commission
Central Registration Depository
National Association of Securities Dealers
United StatesUnited States
CanadaCanada
Give the benefit of the doubtGive the benefit of the doubt
Running a Running a backback ground checkground check
Canadian Securities Administrators
System for Electronic Document Analysis and Retrieval
Canadian Securities Administrators
System for Electronic Document Analysis and Retrieval
• Stock—per share
• Mutual funds—load
• Bonds—spread
• Anywhere from $5 to $200,
depending on broker
• Stock—per share
• Mutual funds—load
• Bonds—spread
• Anywhere from $5 to $200,
depending on broker
Commission Commission
$$$$$$
Broker makes money with each transaction. Broker makes money with each transaction.
• Broker is paid a certain percentage of the value of money s/he controls for you.
• Usually about 1.5%
• Broker is paid a certain percentage of the value of money s/he controls for you.
• Usually about 1.5%
Asset-management fee Asset-management fee Salary Flat fee or hourly fee Commission/fees
combination Hidden costs
Salary Flat fee or hourly fee Commission/fees
combination Hidden costs
• Churning—recommending excessive trades to collect commission
• Recommending securities to receive a prize or other incentive
• Recommending “house” products instead of relying on research and intuition
• Churning—recommending excessive trades to collect commission
• Recommending securities to receive a prize or other incentive
• Recommending “house” products instead of relying on research and intuition
Quick CaseQuick Case
She’s shopping for a broker.She’s shopping for a broker.
Campbell’s ChoiceCampbell’s Choice
What type of broker would be best?What type of broker would be best?
What factors does she need to consider?What factors does she need to consider?
What precautions does she need to take?What precautions does she need to take?
MarkED
Acknowledgments
Original DevelopersSarah Bartlett Borich and
Lelia Ventling, MarkED
Version 1.0
Copyright © 2007MarkED Resource Center
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