Fees, Fees, and More Fees

Brokered accounts can be a beneficial part of any retirement plan.  It's important, however, to be aware that there are typically a number of fees involved with these accounts.  Of course, this shouldn't come as a huge shock, seeing as how nearly every account in your financial portfolio has at least some type of fees.

That being said, a number of brokered accounts have fees that can negatively affect your livelihood if you aren't knowledgeable about them.  Before you decide if a fee-based brokered account is right for you, it's a good idea to gain some insight into the types of fees you may be subjected to.  To assist you with this, here are some tips you should consider when making your decision.

Tip #1:  Be aware of how a brokerage firm makes money.

Corporations exist not out of the kindness of their heart, but as a way to make money.  So when they're devising the rules and regulations for a brokered account, one technique they will utilize is the charging of fees.  A number of these fees are standard and won't hurt your finances too much, while others could be construed as a bit more sinister in nature, designed in such a way to charge huge fees for certain actions.  This doesn't necessarily mean that the brokered account is bad.  You simply need to watch out for these fees and know what they could mean to your own bottom line.

Tip #2: Make sure to look at the list of fees before you open a brokered account.

Honestly, this goes with every account you open, not just brokered ones.  It's important to peruse the necessary documents that correspond to these accounts before you even consider opening one.  If you have concerns with any of the listed fees, ask about them.  Better yet, take the documentation to a financial expert, who will give you straightforward information with no agenda except for protecting your finances.

Tip #3:  Don't be too concerned with normal fees.

As previously stated, every account you have is going to have what's typically referred to as a "fee schedule," a list of fees that you will incur for a variety of events.  Below is a list of some of the actions/services that will most likely have fees attached.  This list is not all-inclusive, but will give you a good idea of what is normal.

-- Wire transfers and conversions

-- Express Mail, both domestic and international

-- Problems with a payment, such as a stop payment, returned check, etc.

-- Statement reprints

-- Closure of account

-- Cash debit

-- Restricted transaction

-- Certificate delivery

Tip #4:  Watch out for the possibility of excessive fees.

You should ask questions about any fees that you either don't understand or are not clear about.  Some brokerage firms have been penalized in the past for excessive fees.  Keep a careful eye on the following fees.

-- Trade Fees:  Each trade you complete will have some type of fee attached.  However, some of these fees have been known to be astronomical.

-- Inactivity Fees:  Just how it sounds.  If you don't do enough trades in a specific timeframe, which would be determined by the brokerage firm's rules and regulations concerning such accounts, you will be forced to pay a fee.

-- Minimum Balance Fees:  A wide variety of accounts that you have in your financial portfolio probably sets a minimum for how much balance should be between cash and securities.  Brokered accounts are no different.  If you fall below this minimum, you may incur a fee.

Source: http://firstsecurityfinancialshow.com/blog/bid/132195/Fees-Fees-and-More-Fees

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