Using Your Bank as a Broker

CAN your banker also be your stockbroker? Well, he or she could not until the government began to allow such double duty a few years ago. Now some 3,000 bank holding companies and savings and loan associations have either bought or linked up with stockbrokers. Just about every large bank in the country has brokerage operations. And it's almost impossible to find a city where some bank doesn't sell stocks. So, the one stop financial shop may be right down your block.

At a number of banks, the brokerage is nothing more than a self service computer terminal with a telephone. Sometimes it's a counter with a bank clerk to help you fill out applications and phone in orders. At others, it's a fully staffed mini brokerage office, complete with trained broker.

Most banks sell stock through their own or an affiliated discount broker. So their commissions are usually lower than those at full service brokers. But the banks' discounters often are 10% to 15% more expensive than independent discounters are. The reason is that only a handful of banks execute their own trades. The rest just take your order and must hire and pay another company to do the buying and selling of securities.

Still, banks are more likely than independent discounters to offer a wide range of so called financial products. Bank affiliated discounters often sell everything from bonds to gold bullion, while some independents confine themselves to stocks and stock options. On other counts, bank affiliated brokerages score well too. They can execute trades almost as swiftly as any discounter and perhaps get the money to you even faster.

But if you want detailed investment research or advice, your best bet is still a full service broker. Most banks will give you only current stock quotes and basic investment information.