Consumer Reports sent undercover investigators to pose as investors looking for advice at major brokerage houses. The upshot: They got mostly good advice, along with some that was not so good.
The magazine, which accepts no ads, found that active investors "can feel good about the level of service and help they get at major U.S. brokerages."
But the investigators found fault with some practices. "One CR's staff member was shown a chart on a portfolio's performance that omitted the significant impact of fees," the magazine reported. "Another tester was pitched a complicated annuity product though the adviser knew little about her."
Annuities are appropriate for a narrow slice of investors. But their high commissions tempt some brokers to sell them to people who would be better off with other investments.
The magazine also polled its readers on the treatment they get at discount brokers. USAA's brokerage led in overall satisfaction. Scottrade, headquartered in Town and Country, and Vanguard also scored very high.
The story is in the magazine's January issue.