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Clark Howard: Investing in stocks

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Updated: 6/17/2013 5:04 pm
JACKSONVILLE, Fla. -- The middle class is struggling to invest because big Wall Street firms don't want their business. There are still some low cost options for small investors.

If you're thinking about investing and you're not a high roller, you won't find a warm welcome at major Wall Street firms.  That's because it costs big firms the same amount of time and money to manage a small account as it does a multi-million dollar account. So wall street firms are adding on fees to people who don't meet a certain financial criteria.

"This phenomenon has been going on for years," said certified financial planner Wes Moss. "They do that by squeezing out smaller investors."

Moss says that doesn't mean there aren't options for the middle class.

"The best way for those families to accumulate wealth is to keep their fees down, to keep their cost down," Moss said.

That means investing in low fee exchange trade funds or EFT's from companies like Charles Schwabb or Vangaurd. There are also smaller investment firms out there that target investors.

If you're looking for a financial planner, make sure they have certifications like a CFP or CFA. Also fee based financial planners are a safer bet than planners that work off a commission.

Moss says that when you choose a financial planner, where they put your money is just as important in how they advise you to invest.

"That firm needs to be utilizing a big national third party custodian, like Schwabb, like Fidelity, like TD Ameritrade,"  Moss said.

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