|
PureBytes Links
Trading Reference Links
|
There is currently far less problems with making clients eat broker errors. since
the 1987 crash almost all firms record all telephone calls. If there is a
problem, have them listen to the tape. that is the easiest way to resolve a
problem. If you want a record for your own reference. Keep a tape of your trades
till they all clear. Most answering machines will allow you to do that. Ira.
I4Lothian@xxxxxxx wrote:
> Early in my career I had the pleasure of working for one of the discount
> firms. Now I am a full-service broker, but compete at all levels of price and
> service. That disclosed, let me offer a couple of insights.
>
> 1) Discount clerks work for the house, not the client. If there are errors or
> problems, the clerks will try to get the client to eat any errors, or split
> them, if the client can be led to believe they were partially at fault.
> Sometimes clients are at fault and should eat those errors. But don't expect
> the clerks to take your side with management, because they are not your
> advocate.
>
> 2) Discount firms have high turnover levels. Young people who become discount
> clerks don't do it for the money. They do it for the experience. They learn
> by taking your orders and watching your trading. If they are ambitious, they
> will not stay at the discount firm, but move on to better income producing
> opportunities in the industry. When I was at the discount firm from 1985 to
> 1988, the firm probably completely turned over 3 times. The firm would hire
> good people, but could not keep them for very long. Thus, largely discount
> firms are staffed by rotating new hires and people who have realized their
> potential and are happy there.
>
> 3) Error rates are higher at discount firms. There was an incentive fee paid
> to clerks if they could keep the errors below a certain amount. I don't
> remember us getting paid on that very often.
>
> 4) One of the great myths of this industry is that you need to go to a
> discount firm to get a low commission rate. There are plenty of experienced,
> knowledgeable full-service brokers, who offer low commission rates for clients
> with discount service needs. The advantage is that the trader has a full-
> service broker to call upon when they do have questions or problems. At a
> discount firm, the clerks don't know as much and are encouraged to get the
> client off the phone as fast a possible. Telephone costs are a big expense
> and somewhat controllable.
>
> This is a service and relationship business. There are plenty brokers, even
> here on RT, who can provide you with the service of a discount firm, and more
> if you need it, for similar prices. I find many people stick with their
> brokers because of the relationship factor. Dealing with rotating clerks at
> discount brokers does encourage the value of continuity and the synergy you
> can create by developing a long-term relationship with a professional broker.
>
> Regards,
>
> John J. Lothian
>
> Disclosure: Futures trading involves financial risk, lots of it!
|