Stock Trading and Other Things

Do stock brokers/financial planners earn more commission when they sell a certain stock?

If one goes to see a financial planner/stock broker that is commision based, is there a push to sell one particular stock? For example, let's say that I am interested in buying stock in General Mills, but Hershey has a higher commision structure for the broker, so they would push Hershey instead. The companies listed are just hypothetical, and the first that came into my head, since I am hungry.

Public Comments

1. The answer is 'yes' that happens...more often than you think. It is also true of mutual funds that are recommended to you.

2. YES Thats One of the ways they make a living.......

3. That depends.

A broker makes the same commission when buying or selling any particular stock, so he does not have a preferrence that is swayed by commission. That being said, the more you trade, the more he makes, so this might influence his relationship with you.

a financial planner, is paid by selling you stuff, by either a fee for time, or a sales commission, and a kickback from the product sold and trailing fees on the investment in the future.

their optimal return is based on you staying with their products long term, and adding more capital over time.

4. Im a stock broker and it is against our firms policy to offer incentives for offering one particular stock over another. This is not true of mutual funds. The fund company itself sets the sales commission. I dont sell funds however in the traditional sense. My practice focuses almost entirely on separately managed accounts and managed mutual fund portfolios. I work for a major wall street wirehouse....and the answer is NO to the question of whether General Mills is better for me to sell than Hershey because the commission is higher. Also, all these planner guys are here to sell you insurance and annuities.....so be careful. Look for an asset manager with a track record and credentials.