How to compare the different types of full-service brokerages
A full-service broker is a company that allows you to buy and sell stocks, ETFs, mutual funds, and other securities.
A full-service broker typically offers a wide range of services which may include the following:
- investment research & recommendations
- wealth management
- investment banking
- cash management
- specialized investments
With most brokers, if your account balance is high enough, a full-service broker will meet with you on a regular basis to review your holdings and personal situation and answer any questions.
There are several types of brokerage firms:
- National brokerages offer a full range of services and have offices in every major city. These large firms are sometimes called "wirehouses" since in the past their offices were connected by dedicated lines.
- Examples: Merrill Lynch (owned by Bank of America), Wells Fargo Advisers, UBS, J.P. Morgan (owned by JPMorgan Chase & Co.).
- Independent Broker-Dealers offer brokerage services to independent representatives who own their own business and in turn offer services to clients.
- Examples: LPL Financial, Ameriprise, and Raymond James.
- Regional Broker-Dealers are similar to the national brokerages, but are smaller and may not operate in all regions of the country.
- Examples: Edward Jones, RBC Wealth Management, Robert W. Baird, Stifel
- Bank-Affiliated Broker-Dealers are brokerages affiliated with banks and allow a bank to provide investment services to its customer.
- Example: BBVA Compass Investment Solutions
- Insurance Broker-Dealers offer investment services that complement insurance products sold by an insurance agency.
- Examples: Northwestern Mutual, AXA Advisors