Consumers have numerous choices when it comes to choosing how to invest their money. Most investors choose bonds, stocks and mutual funds. Those with the right expertise, or the help of an investment advisor, may wish to invest in gold, real estate or other alternatives.
All investments come with risks, and determining which investment option is right depends on a consumer’s financial situation and goals. The investment company industry is comprised of a broad range of company types and services, so all investors can find someone to help them with the kinds of investments they want to make.
Top 10 Best Rated Investment Companies
Lear Capital is an online market that buys and sells coins made from precious metals. The company visits clients in their homes or businesses to assess the values of, and potentially purchase, large coin collections.
|Read 694 Reviews|
Dean Graziosi is a rest estate investor who has written multiple books about real estate, finance and investing. He formed Dean Enterprises, LLC in 2002 to create and produce additional educational materials.
|Read 470 Reviews|
Armando Montelongo is a real estate investor who appeared in several seasons of A&E’s show Flip This House. His company now offers seminars across the United States to teach others about the real estate market.
|Read 47 Reviews|
Located in Palo Alto, Wealthfront is a company for automated investments that was founded in 2008. Wealthfront invests money for clients looking for advice and guidance, and they also offer sophisticated money management tools.
|Read 9 Reviews|
FutureAdvisor was founded in 2010 in San Francisco, CA. The company is dedicated to advising clients about investments, helping customers plan for retirement and educating about saving for college, among many other focuses.
|Read 14 Reviews|
American Century is a privately-held investment management company. It focuses solely on money management. The company was founded in 1958 and is headquartered in Kansas City, Missouri with other offices around the world.
|Read 15 Reviews|
Charles Schwab has been in business since 1973. The company offers extensive financial and investing services, including online trading, managed investment and retirement accounts, banking and credit cards.
|Read 152 Reviews|
TD Ameritrade has been in business since 1975 with headquarters in Nebraska and branches in 33 states. It offers financial and investment products for both self-directed investors and those who want investment advice.
|Read 135 Reviews|
Scottrade, established in 1980, offers products and tools to meet most investors’ needs, including self-managed trading accounts, retirement accounts and more. The company’s headquarters are in St. Louis.
|Read 145 Reviews|
Prudential sells life insurance and annuities and offers investment management accounts for retirement and income goals. The company has been in business for more than 140 years and operates in over 40 countries.
|Read 10 Reviews|
What features should investors consider when choosing a company?
When someone is giving you investing advice, it is important that you trust them. Many factors can help you determine whether or not the individual advisor or firm is trustworthy.
- Regulatory registration: Ask whether the investment firm or individual advisor is registered with the Securities Exchange Commission (SEC), Financial Industry Regulatory Authority (FINRA), the Community Futures Trading Commission (CFTC) or the regulatory agency in your state. You can check their registration on the SEC, CFTC or FINRA websites. Visit the North American Securities Administrators Association website to find the state organization where an advisor would need to register.
- Fiduciary or suitability standards: Ask whether your advisor will be bound by fiduciary or suitability standards. Legally, registered investment advisors must either meet fiduciary or suitability standards. Under fiduciary standards, the advisor must advise you to make investments in your overall best interest, while suitability standards only require an advisor to recommend products that are suitable for your current financial portfolio. Following suitability standards, advisors might recommend products that will earn them more money, even if a different product might be best for you.
- SIPC member: If you’re investing in the stock market, choose a firm or agent that is a member of the Securities Investment Protection Corporation (SIPC). The SIPC insures that consumer assets, up to $500,000, will be protected if the firm goes out of business and investor assets are missing. Note that the SIPC does not protect investors from losses due to market changes.
- SIPC member: Not all types of investments or investment advisors are eligible to register with FINRA or the SEC or to be a member of the SIPC. If you’re investing in products not regulated by those organizations, consider how long the investment company of agent has been in business. A long history can indicate how reputable and stable the firm is.
- Common sense: It’s important to use common sense when investing. If someone offers an investment that seems too good to be true, it probably is. Trust your judgment, and don’t give money to individuals or businesses without thoroughly researching their qualifications and the kind of investments they’re recommending.
You can invest in many different types of products. Think about your investing goals and how comfortable you are with risk because these factors should determine which products you choose. Research different kinds of investments and then pick a company that offers those.
- Securities: A security is simply something that shows partial-ownership, equity or a creditor’s relationships with a company or the government. Stocks, bonds and options are all types of securities. If you buy individual stocks or invest in a mutual fund that includes stocks and bonds, you’re investing in securities. Most investment firms offer securities.
- Real estate: You can invest in real estate by purchasing property yourself or by investing money with a real estate investing company. Most of these companies operate Real Estate Investment Trusts (REITs), which work much like a mutual fund in that your money is combined with other investors’ money to make a larger purchase than any of you could make individually. REITs are traded both on the stock market and through private investment companies.
- Precious metals: Gold, silver and/or platinum are important parts of some portfolios. If you’re interested in purchasing gold and silver, you can purchase exchange traded funds (ETFs) or futures, which make it possible to trade precious metals on the New York stock exchange. You can also order coins or bars and keep the metal in your possession. Some investment companies offer certificates, much like bank Certificate of Deposits (CDs), which allow you to own bullion without possessing it.
- Hedge funds: Hedge funds are similar to mutual funds in that many investors’ funds are combined and profits and losses are shared among the group. However, these investments use more speculative practices than mutual funds. The SEC and state regulatory agencies do not regulate hedge funds in the same ways they regulate mutual funds, and investors do not have as many legal protections when investing money in hedge funds.
Investment companies make money in a variety of ways. To ensure that you aren’t overpaying for services and to verify that your advisors aren’t recommending products only for their profit, make sure you understand all the fees and costs associated with your account.
- Account fees: Some accounts charge a fee every month, quarter or year. This fee won’t change based on the number of transactions you make. Instead, it is based on the value of your investment account. The more money you invest, the larger fee you’ll pay.
- Flat fees: Some companies charge a fee for every transaction. These flat fees are straightforward and generally easy to understand. However, you may end up paying more in flat fees than you would if you paid an account fee. These fees are not based on the amount of money you’re investing.
- Commission: Some flat fees may be called commissions. Your investment agent may also earn a commission from the company when they sell particular products. Although this practice won’t cost you any money, agents who follow suitability standards may recommend products based on their potential income instead of what is best for you.
- Seminar fees: Some investment companies only offer advice on how to invest; they do not actually facilitate any investments. These companies or individuals often make money by charging investors to attend a seminar or pay an education fee. You pay for their advice like you’d pay to attend a class.
Philosophy and fit
It is important to find an investment company with agents who understand your goals and are accustomed to working with investors like you.
- Minimum investments: One of the first questions you should ask is what minimum investment is required. You can’t work with a company that requires a larger investment than you’re willing to make.
- Proactive recommendations: Ask how and when advisors make changes to your portfolio. Look for a company that will make recommendations before a change instead of being reactive to changes in the market or changes in your financial situation.
- Investor involvement: Before choosing a firm, think about how involved you want to be in investing. If you just want to deposit money into an account and have someone else do all the investing work, look for a full service company that has professional brokers to assess your financial situation and goals and then make the best investments for you. If you want to be more involved, you can choose a company that offers less professional advice, which may result in lower fees.
What are the different types of investment companies?
Traditional brokerage firms offer investors a wide variety of services and have professional brokers on staff to advise consumers. Those looking for a comprehensive investment portfolio should choose a full service, traditional investment company.
Focused investment type
Some investment companies focus on a single type of investment, like precious metals or real estate. Consumers who are especially interested in that commodity or are looking to expand their existing portfolio may wish to choose this type of company.
Workshops and seminars
Some investment companies focus on investor education instead of investments. Consumers who want to be very involved in their investments or simply want to learn more should consider attending workshops held by one of these companies.
Who should consider making investments?
Parents, grandparents and guardians
Anyone who has children in their life can make an investment for them. Investing can be a starting point for a college fund and can teach children the importance of saving.
Those just starting out in their career should begin investing early. The earlier they begin saving, the less money they will need to save because of compounding interest.
Working adults that didn’t start saving when they got their first job should find an investment company to help them plan for retirement and make up for lost time.
Business owners should consider investing part of their profits. They can choose products that will ensure a regular income stream if their business has an unexpected problem, or they can select investment products to save for retirement.
Employers should consider investment companies that can offer retirement plans to their employees. Offering retirement and savings benefits can help attract higher quality candidates and improve retention.
Information in this guide is general in nature and is intended for informational purposes only; it is not legal, health, investment or tax advice. ConsumerAffairs.com makes no representation as to the accuracy of the information provided and assumes no liability for any damages or loss arising from its use.
11 – 16 Best Rated Investment Companies
Merrill-Lynch was founded in 1914 and is headquartered in New York. The company offers clients financial advice about managing existing money and investing for the future. Advice is based around clients’ priorities.
|Read 229 Reviews|
Edward Jones Investments is a company that was founded in Des Peres, Missouri in 1922. The company offers financial advisers to help clients invest their money smartly.
|Read 57 Reviews|
Established in 1946, Fidelity offers many investment products, including online U.S. and international trading. The company is headquartered in Boston and has over 190 branch offices across the country.
|Read 307 Reviews|
E*TRADE provides a variety of financial services. Established in 1982, E*TRADE has been in the online trading industry almost since the company’s inception. It is headquartered in New York City with offices in 17 states.
|Read 307 Reviews|
Headquartered in Minneapolis, Ameriprise offers investment advice, wealth management, life insurance, annuities and retirement planning. It has been in business since 1894 and now manages more than $750 billion in assets.
|Read 218 Reviews|
|Out of Business|
Federal Financial Group LLC sells insurance policies and annuities as investments and savings plans. The company was founded in 2003 and is headquartered in Draper, Utah.
|Read 30 Reviews|