As financial advisers and not stockbrokers, Chris Humphrey Private Wealth Management is happy to provide advice, and work with your stockbroker of choice. We can work with your stockbroker in a number of ways:
- Provide international equities and fixed income products through managed funds
- Provide financial advice only (so no investment advice)
- Co-manage your share portfolio (e.g. a 70/30 split).
Choosing a stockbroker
There are a number of issues you should consider if you are seeking a stockbroker:
- If your stockbroker charges brokerage, how do they manage conflicts of interest? Are they prepared to charge you on a fee for service basis?
- What share of public floats does your stockbroker receive within their firm? What market share does your stockbroker’s firm receive?
- What share of public floats and share placements will you receive from your stockbroker? For commercial reasons stockbrokers will favour their larger clients who provide them more revenue, which may mean you miss out.
- How does your stockbroker determine your risk profile? If required, do they provide exposure to fixed income and international equities?
- Does the stockbroker charge reduced rates of brokerage if you do your own research?
- Is your stockbroker prepared to meaningfully benchmark themselves against a relevant index (e.g. ASX200 Accumulation Index)?
- Does your stockbroker’s investment approach consider post tax investment returns? For example, do they consider keeping stocks for longer than 45 days when a stock pays a dividend?
- Does your stockbroker use research outside of their firm and if so on what basis?
- Does your stockbroker’s firm have a model portfolio? If so how much of the model portfolio does your stockbroker use?
- Does your stockbroker provide equity allocation strategies (e.g. large versus small cap stocks, value versus growth stocks, and resources versus industrial stocks)?
- Do they have a stock selection process? How long has the broker used this process?
- Is your stockbroker licensed to provide advice on derivatives? Does their license cover strategies such as the buy write strategy?
- Can your stockbroker provide historic returns for clients similar to you?
- Does your stockbroker’s firm also provide financial planning services? If so, how does it address potential conflicts of interest?
- Does your broker use hybrid bonds to facilitate fixed income exposure? If so, do you understand the difference?