Determine whether your needs would best be served by a brokerage house or an investment adviser

When a broker dealer makes recommendations for a client, he generally charges a transaction fee for the security that is bought or sold and is concerned that the investment is suitable for the client. When an investment adviser provides advice, he generally doesn't charge a fee on a transaction basis, but often as a percentage of assets, and the investment adviser has a fiduciary responsibility to the client. What does that mean and which one is right for you?

I recommend: Both Overregd.com and the Nebraska State Department of Banking and Finance do a good job of explaining the difference between brokerage dealers and investment advisers and how they are compensated. If you decide that a broker dealer is the best option for you, Kiplinger can help determine whether a full service or an online or discount investment brokerage firm is right for you.

Learn the advantages of online and discount brokerage houses

If you are a self-service kind of person, enjoy researching companies and don't want to pay high transaction fees, an online or discount investment brokerage may be your answer.

I recommend: Kiplinger discusses how online or discount stock brokerage firms can work for you, and they have an online tool that walks you through questions to help you choose from the top brokerage firms. Some well-known online and discount stock brokerage firms include Schwab, Fidelity Investments and E-trade.

Learn the advantages of full-service brokerage houses

If you know you need help with your investment decisions, the full-service brokerage service company may be right you. Also, if you still have not decided whether a broker dealer or investment adviser is right for you, the good news is that many full-service brokerage companies also offer investment adviser services.

I recommend: Kiplinger offers a non-biased article on what full-service brokerage companies can offer. It is a good idea to check the FINRA website to see if a potential independent broker has any regulatory history or issue before investing. Some well know investment brokerage houses include UBS Financial, Morgan Stanley and Merrill Lynch.