How to Pay Less and Get More: Discount Broker vs Professional

How do you invest? What do you really pay? At the end of the day, what are your real results? These are questions smart investors should be asking themselves (but usually don't). In this era of more fees, misc. charges, holding periods and back end redemptions, even at discount brokers, how are you really making out?

Working with a new client brought this all to my attention. I know what I found may not apply to everyone; however it will apply to many and very likely apply to you.

I need to preface this by saying that, unlike the majority of registered investment advisors, I have built my practice over the past 15 years by dealing with "small" investors. Many of them are first timers because my minimum account size is only $5,000.

I targeted this group because I enjoy the educational part of my business. A happy side benefit has been that by providing million dollar service to these so called "small" investors, they naturally refer me to parents, relatives, friends and business associates, often with considerably more assets than the original client. What a happy consequence.

Having set the stage, here's what happened with my new client who we will call John. John was 26, newly married with a one year old son. His wife was taking care of the child and John had a good full time job. After selling his house in California and moving to Florida he had $6,000 left for starting a long-term investment program.

Though he had been reading my newsletter for about a year, John decided to manage his 401k on his own. It was a noble effort but provided less than desirable results.

He then attempted to set up a brokerage account at a major discount broker. With his $6,000 he was told that the quarterly fee would be $45, and, of course, if he sold any mutual fund within the first 180 days, there would be an early redemption fee.

$45 per quarter would be equal to an annual fee of 3% of his starting balance. John called me somewhat frustrated and said that he'd be willing to set up an account with me, but how would it make sense if in addition he'd have to pay my advisory management fee?

That was a good question because it certainly doesn't make sense to have an account in any type of market environment and pay about 6% in fixed annual fees.

However, what John didn't know was that if you have an account with a registered investment advisor who is affiliated with custodial broker, the fee structure changes.

What did that mean to him? It meant that I opened the account for him as a new client. He now has no annual fees, other than my management fee, and his 180 day holding period for mutual funds is reduced to 90 days, minimizing, if not eliminating, the likelihood of an early redemption fee.

The net result was that he would receive the benefit of my experience-which he already trusted based on my track record of pulling clients out of the market in October 2000-and it would cost him no more, and likely less, than his discount brokerage account.

Needless to say, John was very relieved. In essence, he traded broker garbage fees for professional management at no additional cost to him.

And, since he itemizes his deductions on his tax return, all fees paid are tax deductible, which is just an added bonus to factor into the equation.

It turned out to be an all around win-win situation for John. I encourage you to review your situation and see if what looks like a discount in fees is actually costing you a premium.

About The Author

Ulli Niemann is an investment advisor and has been writing about objective, methodical approaches to investing for over 10 years. He eluded the bear market of 2000 and has helped hundreds of people make better investment decisions. To find out more about his approach and his FREE Newsletter, please visit: http://www.successful-investment.com; http://www.successful-investment.com

recurring maid service Buffalo Grove ..
In The News:

The iconic Mary Kay pink Cadillac goes electric with the Cadillac Optiq, available only to the company's top 1% of sales force performers.
Cybercriminals abuse trusted Intel driver to gain kernel access and shut down Windows Defender, enabling undetected malware deployment since July 2025.
Using email aliases for online shopping and subscriptions can protect your privacy by preventing companies from linking your activity across websites.
New research shows AI overlap does not equal job replacement, with knowledge-based roles seeing most integration while physical jobs remain least affected.
Scammers target seniors who avoid social media by exploiting public records like obituaries and real estate filings to steal personal information and money
Recovery team in Italy use AI-enabled drones to detect missing hiker's red helmet, leading to successful recovery after months of ground searches
Google Salesforce system breach exposes business data while scammers use incident to target users with fake security calls and phishing attempts.
Google announces Pixel 10 lineup with Tensor G5 chip and Gemini Nano AI, introducing Magic Cue, Pro Res Zoom up to 100x and satellite emergency support features.
C San Diego study reveals 86% of school safety companies monitor students 24/7 on personal devices, raising privacy concerns.
Users can now add their favorite outlets' coverage to the Top Stories section of Google search results by utilizing the 'preferred sources' feature. With just a few clicks, you can add Fox News.
Stay up to date on the latest AI technology advancements and learn about the challenges and opportunities AI presents now and for the future.
Interstellar object 3I/ATLAS shows an unexpected frontal glow that Harvard's Avi Loeb says cannot be explained by sunlight reflection or standard cometary outgassing.
Receiving order confirmations for purchases you never made could mean your email address is being exploited in fraud operations targeting multiple retailers.
First wireless brain implant works with Apple's official protocol, enabling hands-free control of iPhones, iPads and Vision Pro through thought alone.
Data brokers sell personal details that scammers use to target retirement funds through fake financial advisor calls and convincing phishing attempts
Ten innovative tech solutions from gait sensors to smart pill dispensers help adults 65+ track fall risks and prevent injuries before they happen.
Meta AI internal documents revealed chatbots were allowed to flirt with children and engage in romantic conversations until the company was exposed by Reuters.
ChatGPT will avoid giving direct mental health advice under new OpenAI rules following instances where the AI model provided harmful or misleading responses.
Your phone tracks you in more ways than that little GPS icon suggests. Here’s how to find and clear hidden location logs on iPhone and Android.
Authorities in France and the Netherlands have been notified. Meanwhile, impacted customers are being told to stay alert.
Apple just rolled out a redesigned Blood Oxygen feature to specific models, following a recent victory in a legal dispute.
Kidney dialysis provider DaVita experienced a ransomware breach by the Interlock gang affecting 916,000 people in the second-largest U.S. healthcare attack of 2025.
A Chinese-made Unitree R1 robot walked Manhattan streets and shopped for shoes as part of KraneShares' $28 million AI robotics fund promotion campaign.
The ShinyHunters cybercriminal group breached Google's Salesforce system through vishing attacks, stealing business contact details and customer data.
Stay up to date on the latest AI technology advancements and learn about the challenges and opportunities AI presents now and for the future.

Hot Stock Investing ... How to Pick Hot Stocks with Momentum Stock Trading

Profitable day traders recognize that momentum trading is among the... Read More

Commoditizing the world

Let's discuss commodities; with the latest Enron situation, it is... Read More

Why Change Funds?

On November 17 I bought 7 different mutual funds and... Read More

Peer Groups

Whenever I see mutual fund comparisons in the trade publications... Read More

Buying New Issues

Has your broker been calling you recently with the "great... Read More

Dont Ask Your Broker

Unfortunately, most of you who are reading my column are... Read More

Its Better

Question: How does it get better when it gets worse?Last... Read More

How to Maximize Your 401k Mutual Fund Returns

When it comes to 401k's there is an overabundance of... Read More

Trading Education: The Best of Both Worlds!

I made my very first investment in the stock market... Read More

Municipal Bonds

Because there are so many stocks that are NOT paying... Read More

Different Types of Mutual Funds

This is a guide to the different types of mutual... Read More

The Holy Grail (of Investment)

Every year I go to the Money Show in Orlando,... Read More

Kick The Tires

Before you buy another car you walk around the lot,... Read More

The Skinny on Mutual Fund Investing

Mutual fund investing is a lot like Thai cooking. Everyone... Read More

Market Timing

Every broker and financial planner will tell you that you... Read More

How To Be A Winner

Everyone who invests in the stock market wants to be... Read More

Trading vs Investing

I often hear from people, "I don't trade. I invest.... Read More

Buy Low - Sell High

Now where have I heard that before? I know. It... Read More

Gold Fever

Right now there doesn't seem to be any "gold fever".... Read More

The Elephant

Four blind men were asked to give a description of... Read More

Boiler Room 7/17/00

On Friday or Saturday evening my wife gets a movie... Read More

Discover the Retirement Breakthrough the Federal Government Created for You - The Roth IRA!

If you don't know what a Roth IRA is then... Read More

Trend Trading - Trading Stocks Using Technical Analysis and Swing Trading Strategies

Peter is a professional trader, Paul is not. Peter has... Read More

Analysts - Do They Really Know The Stock Market?

When you become interested in a stock or mutual fund... Read More

Forecasting the Stock Market

Every day I see in the financial section of newspapers... Read More

premium house cleaning Glenview ..