With trading directed by an advisor, is the choice of a brokerage firm still important?
It’s no less important than in any other investment relationship. On a day-to-day basis, the brokerage firm may be monitoring and evaluating the advisor s performance even more closely than you will. In addition, although the advisor directs trading for your account, it is generally your brokerage firm that will execute the trades, and manage all “back office operations” regarding your account. Thus, it’s important to know you are doing business with a firm that has the resources and skills to compete effectively in today’s markets. Some do, better than others. And intangibly, but by no means least, it’s important to have a high comfort level with the broker you’ll be working with.
