"Full-service" brokers get their name and reputation from the dogged and devoted work they're expected to do to keep clients happy. They carry business cards from distinguished brokerage firms like Salomon Smith Barney and Merrill Lynch. In an ideal world, a broker provides sound, profitable investment ideas, and furnishes up-to-the-minute research to keep you current with market trends, stock performance, and tax information. Most importantly, a full-service broker uses your money to make you richer. Clients pay good money for a service they have neither the time nor the attention span to perform for themselves.

Buyer beware

But what if this "ideal" profile bears little similarity to the broker who handles your money? What if most of the investment suggestions you hear coincide with the firm's latest stock picks, or worse, overpriced mutual funds? And does it seem like your broker makes an awful lot of trades to little discernible effect? Brokers earn their living from commissions - some might charge as much as $75 for a single transaction. The more transactions they make, the more they earn on each account, which can lead to "churning," a term that applies to trades made with the primary intent of generating a commission.

"Even if a broker were pushing in-house recommendations on me, or over-trading my account somewhat," said Bill Kerr, a private investor from Chicago, Ill., "as long as there's a hefty profit on the bottom line of my statement, I'm not about to complain. But if my investments are not meeting my return expectations, then I have a problem."

All of which invites the question, what kind of returns can one realistically expect, particularly in today's volatile market? "Any money I entrust to a full-service broker should never underperform the market," said Carmel Boss, an Internet CEO from Santa Monica, Calif., "certainly not when I can get average market rates out of an index fund without having to do any research or fork out full-service brokerage rates."

Do your own homework
"Luckily for brokers, a lot of clients don't know how, or even try to learn how to test their investment performance against the market's averages," said Kerr. "But I bet those same folks spend a lot of time reading about Nicole Kidman's likely divorce settlement."

That a broker wouldn't encourage clients to seek investment evaluation makes sense, especially if the numbers don't look good. To be sure, it would seem to go against the professional grain of those who sell investment advice to instruct account holders on how to manage their own money.

According to Kerr, "brokers want to maintain the illusion that insiders know a great many secrets that outsiders couldn't begin to grasp. Obviously anyone who spends every day handling such matters has the advantage over part-timers, but deciphering the financial world is not that complicated. Anyone of average intelligence can master it, as long as they make the effort."

To be fair, folks who have so much money in the market that they simply don't have enough time to stay on top of investment trends would probably be good candidates for the use of a full-service broker. After all, they should be using their free time to make more of that money they're investing. And hey, stock brokers need to make a living too.

- Audrey Arkins, Salary.com contributor