Donald Belson and Laurie Hall, friends who work for a large software company, decided to leave the relative security of their employer and join the staff of Hamelin Pipers, Inc., a two year- old company working on new software and hardware solutions for high-speed video over the Internet. Donald will be a vice president for new-product development; Laurie will be treasurer. Although they are excited about the potential their new jobs offer, they recognize the need to consider the financial implications of the move. Of immediate concern are their 401(k) retirement plans. On leaving their current employer, each of them will receive a lump-sum settlement of about $75,000 that they must roll over into self-directed, tax-deferred retirement accounts. The friends met over lunch to discuss their options for investing these funds.
Donald is 30 years old and single, with a bachelor’s degree in computer science. He considers himself a bit of a risk taker and has dabbled in the stock market from time to time, using his technology expertise to invest in software and Internet companies. Laurie’s undergraduate degree was in English, followed by an M.B.A. in finance. She is 32, is married, and hopes to start a family very soon. Her spouse is a physician in private practice.
Donald is very computer-savvy and likes to pick stocks on the basis of his own Internet research. Although Laurie’s finance background gives her a solid understanding of investing fundamentals, she is more conservative and has thus far stayed with blue-chip stocks and mutual  funds. Among the topics that come up during their lunchtime conversation are stockbrokers and financial advisors. Don is leaning toward a bare-bones basic discount broker with low cost per online trade that is offering free trades for a limited time. Laurie is also cost- conscious but warns Don that the low costs can be deceptive if you have to pay for other services or find yourself trading more often. She also thinks Don is too focused on the technology sector and encourages him to seek financial advice to balance his portfolio. They agree to research a number of brokerage firms and investment advisors and meet again to compare notes.

Questions
a. Research at least two different full-service, premium discount, and basic discount stock brokerage firms, and compare the services and costs. What brokers would suit Donald’s needs best, and why? What brokers would suit Laurie’s needs best, and why? What are some key questions each should ask when interviewing potential brokers?
b. What factors should Donald and Laurie consider before deciding to use a particular broker? Compare the pros and cons of getting the personal attention of a full-service broker with the services provided by the discount brokers.
c. Do you think that a broker that assists in making transactions and focuses on personal attention would be a good choice for either Don or Laurie?
d. Don mentioned to Laurie that he had read an article about day trading and wanted to try it. What would you advise Don about the risks and rewards of this strategy?
e. Prepare a brief overview of the traditional and online sources of investment advice that could help Don and Laurie create suitable portfolios. Which type of advisor would you recommend for Don? For Laurie? Explain your reasoning.