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One of the major advantages of choosing a discount broker over a full-service broker is that you can align your investment strategy to your own long-term interests. The middleman doesn't get in the way; your portfolio doesn't get churned.

What's churning? Churning is when a full-service firm pushes transactions through client accounts to generate commission revenues. Too many people don't understand what's happening when their broker calls again this week with another buy and/or sell recommendation (straight from "The Firm's" analyst). Even experienced investors often don't think it through.

For instance, when I managed money professionally, I had an ex-client who refused to give up his full-service broker. Over the years, the broker had put him in more junk than you can imagine. In fact, his performance over the last five years has run about 6% annualized (as the market has risen more than 20% annually). He's okayed about four trades a month. That's 48 trades a year, for those of you counting. His commissions run about $400 a pop, so he's paying $19,200 in commissions per year, to have his $400,000 account underperform the market by nine percentage points per year.

That makes no sense.

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