No matter what your goal is, you should definitely test-drive a brokerage firm before opening an account. Scour its web site, visit its offices nearby, and talk to the phone reps to see how smart they seem. And listen carefully to see how much they push their own mutual funds and other products, even when they may not be right for you.

Think you’re all set because your parents’ broker offered to help you out? Think again. Brokers who do this sort of thing are often simply trying to keep the parents happy, not because they know much about what it’s like to start out as an investor or how to help such a person. Ask the same questions you would of any broker before you make a move like this. (Find the right questions to ask in our Grilling Guide .)

In the end, if you follow our advice about index investing and reallocating once each year, it won’t matter much where you keep your money. You won’t be trading often enough to run up many commissions, and within a few years you’ll make enough money overall to avoid any minimum balance fees. And if you’re working with an independent financial planner, you can often keep your money anywhere you want and simply act on the planner’s advice once each year.

Many of us here at FiLife are with discount brokers ourselves: Schwab, Fidelity and Vanguard, though our fearless leader ended up at Merrill thanks to a wily cold-caller. We like the combination of robust tools and web sites, which the discounters have, and the fact that there isn’t a push broker assigned to our account whose motive we need to constantly question.

When we want advice – and getting advice is a good thing – we go to a financial planner. Again, go here to read more about how to find a good one.

The good thing here is that it’s not a total disaster if you pick one brokerage firm and then realize you’ve made a mistake. Switching is a bit of a pain but probably not as bad as switching banks or eveven primary credit cards these days.

Want to Know More?

• What's a Brokerage Firm?
• Do You Need A Broker?
• Grilling Guide: Questions to Ask When Picking a Brokerage Firm