Choosing a Commodities Broker Philadelphia PA

Choosing someone to handle your financial affairs can be a nerve-wracking affair. But some of the same elements apply regardless of what aspect of your finances you are dealing with.

1. Probably the first and most important element is TRUST. I'm not talking about blind trust here. That's the kind where you follow your broker off a cliff no matter what. I'm talking about that gut feeling that you have where you feel that he's being straight with you. The broker will certainly not always be right, but you should be comfortable that he's making decisions based on your interests and not his own.
2. The second element is knowledge, and/or experience. A commodities broker requires a separate license from a general stock and bond broker. You will need to find someone with a commodities license. A general stockbroker may also carry a commodities license. But beyond that, you should look for someone who regularly trades commodities. Trading in commodities isn't for the faint of heart. It's among the riskiest of investments and you should look for someone who isn't just licensed and doing this occasionally.
3. The third element is regulatory actions. You should check with the U.S. Commodity Futures Trading Commission. Legal actions and lawsuits are public records. One word of caution, just because you see an item on his record doesn't necessarily mean the broker is bad, it just means you need to check further and be more cautious. Some people will sue to get back money they lost - even if it was their choice in the first place, or there was no fault on the part of the broker, just market conditions. Firms will sometimes settle rather than fight out a lengthy arbitration or lawsuit battle - even if they would win. They might pay more in legal fees if they fight. So if all the other conditions for your particular choice seem right, and you see something here, ask. There are always two sides and you might want to give the broker a chance to give his side.
4. The fourth element is location. Some people want a broker they can meet with face to face. That isn't necessary, but you need to go with what you are comfortable with. Many brokers are licensed in multiple states and everything can be done over the phone. But if you are more comfortable working with someone you've met personally, I suggest you look for someone located near you. Otherwise, the next time you are traveling in the city where your broker works, set up an appointment to meet while you're there, or ask him to set up an appointment with you next time he's in your city. Both are valid options.

All these elements point to finding someone you feel comfortable with and can trust. After all, this is your financial health! These kinds of choices are not cut and dried and personality does make a difference. So make sure you are compatible and that you can trust your commodities broker.

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