Can You Find An Honest Broker on Wall Street?
by John Schroy filed under Individual Investors, Bankers, Brokers
The answer to this question is yes, maybe, and no, depending upon what services you are seeking and the degree of your expertise in the market.
 Diogenes the Cynic
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Seeking a proper broker on Wall Street reminds us of Diogenes the Cynic who, as the story goes, went out in broad daylight with a lantern, looking for an honest man.
If you are only looking for custody service, the answer to the headline question is a resounding Yes! There are many honest brokers providing high quality custody service at an extremely reasonable price.
For most investors, custody services are one of the great value bargains in U.S. financial markets.
Most brokers will provide custody services free of charge to their clients, including safe custody, collection of dividends and corporate entitlements, accounting, valuation, and reporting of positions, custody insurance, reinvestment of dividends (without a commission), provision of tax documents, and forwarding of reports and communications from issuers.
One caveat with respect to custody services is that brokers try to promote ‘paperless accounts’, which means that the only proof you have that your assets exist will be on the broker’s own computers, which may be destroyed in a terrorist attack. Prudence calls for paper-based documentation.
