Beginning in April 2010, some of the largest brokerage firms in the United States are imposing penalties on accounts that don’t fall within a substantially high investment range. As part of a larger plan to focus only on those top-tier clients who bring in an impressive income, these brokerage firms are bypassing the potential revenue from first-time investors and the average American family.

One of the biggest announcements is the addition of quarterly fees averaging at $35 for any account under $25,000. While the fee may seem fairly small ($140 a year), it represents a rather large percentage when you’re considering investments in the $1,000 to $10,000 range, which are already subject to commission fees and decreased payouts.

Additional changes at top brokerage firms include:

· Limited or no payouts on accounts under the $50,000 to $100,000 range

· Annual fees on accounts under the $1 million range

· No more discounts for friend and family member accounts

Some companies have also moved accounts under the $250,000 range to a “call center” model, wherein clients are served by whoever happens to answer the phone, rather than invited to build a relationship with a single broker.

Why All the Investment Changes?

The reasons larger brokerage firms are making these changes are primarily to free up their brokers to concentrate on larger investment portfolios. Although these companies certainly make money on the smaller accounts, the time needed to handle them doesn’t provide the best outcome for the company’s bottom line.

Of course, this doesn’t mean that only millionaires can open brokerage accounts and set up investment plans. In fact, some smaller financial firms are more than happy to take on the clients the other brokers don’t want. This is especially true among community-oriented brokers who specialize in small opening accounts and first-time investors. Internet brokerage firms are also taking advantage of non-millionaire investors, offering low- to no-cost initial set up fees and restrictions.

How to Get Started Investing

If you’re looking to start investing with any dollar amount between $500 and $25,000, it’s a good idea to look at small brokerage firms first. Many of these firms have information packets for first-time investors, and they may provide a breakdown of how much your investment costs will be and how they relate to your initial investment. These types of firms may also cultivate a more personal approach to the process, so that even if your investment is low, you’ll still get access to “your” broker when you have questions, concerns, or changes to make.

Although the big name brokerage firms are the ones most people turn to in the beginning, it’s important to realize that there are other options out there. Whether you take a do-it-yourself approach with an online brokerage firm, or you find a smaller, community firm that works with other people with your financial background, the most important thing to remember is that you don’t have to have tens of thousands of dollars in order to start building a portfolio of your own.

Wesley E. Watkis is managing partner of the W&W Group LLC. For more information, e-mail him at