Customers Need to be Mindful of Discount Brokers Pushing Pricier Services- Part 2

Posted on January 24th, 2018 at 4:08 PM
Customers Need to be Mindful of Discount Brokers Pushing Pricier Services- Part 2

From the Desk of Jim Eccleston at Eccleston Law LLC:

This is the second in a series of posts to discuss why customers must be cautious when a discount broker pushes pricier services for investments. Three of the largest discount brokers by assets include Charles Schwab Corporation, Fidelity Investments, and TD Ameritrade Holdings, Corporation.

According to a recent Wall Street Journal article. even though discount brokerage firms are recognized for bringing low-cost investments to their customers, it is evident from reviews by former employees that these firms encourage brokers to sell products that are more lucrative both for the firm and for the broker.

Furthermore, although discount brokerage firms insist that they have extensive policies and procedures designed to prevent brokers from unduly pushing products or services, former employees point to the fact that firms incentivize brokers for referring clients to independent investment advisers. Discount brokerage firms receive up to .25% annually on assets committed by their referrals.

The attorneys of Eccleston Law LLC represent investors and advisors nationwide in securities and employment matters. The securities lawyers at Eccleston Law also practice a variety of other areas of practice for financial advisors including Broker Litigation & ArbitrationStrategic Consulting ServicesRegulatory  MattersTransition Contract Review, and much more. Our attorneys draw on a combined experience of nearly 65 years in delivering the highest quality legal services. If you are in need of legal services, contact us to schedule a one-on-one consultation today.

Related Attorneys: James J. Eccleston

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