What They Don't Tell You About Brokers

Securities brokerages today have a business model similar to real estate brokerages. When you go to buy or rent a property, no broker charges you to spend the day with you showing you alternatives, as he receives a commission from whoever is selling or renting the property. Likewise, brokers today do not charge you anything to help you decide where to invest your money, as they receive commissions that can reach 50% of all fees charged by investment funds to take care of your capital. With this practice, there may be a misalignment between your interests and those of brokers, as they are financially incentivized to recommend you funds that pay better commissions, which are not necessarily suitable investments for you. Therefore, it is important for you to get to know the investment funds in which you intend to invest, in the same way that you would make a point of visiting a house before buying it, instead of buying the one that your realtor recommends.