With trading volume on the New York Stock Exchange reaching about 500 million shares a day, have you stopped to wonder who's handling all those shares?

They're minting new stockbrokers by the minute. The total number of brokers rose 25 percent between 1992 and 1996, to 534,989. But I don't believe there are that many stockbrokers who know what they're selling.

Newcomers often practice on their relatives, friends and innocents who are just starting accounts. They're taught how to keep you buying, selling, and buying again, to generate commissions for the firm.

The old joke says it takes $100,000 of brokerage-firm money to train a stockbroker, and $1 million of customer losses.

After the 1987 crash, I saved the published comment of a stockbroker who lost an Oklahoma farm couple $200,000. He sold their municipal bonds and put the proceeds into options trading, which generates continuous commissions.

"Hey, I'm sorry," he said. "I didn't know what I was doing."

Ethical brokers earn their keep by giving you good advice and not shoving anything down your throat. By contrast, an incompetent or venal broker may tempt you to:

- Trade stocks instead of holding them for the long term. For example, shortly after selling you shares in HotStok Inc., your broker may advise that "it's time to take profits." That's three commissions one for buying you HotStok, another for selling it, yet another for buying you something else.

- Buy stocks on margin, that is, with borrowed money. Borrowing money doubles the number of stocks you can buy, which doubles the commission that your broker earns. But if this market tumbles, margin buyers will have to find cash to cover their loans.

- Buy investments that require frequent trades, such as stock-index options. These are bets on which way the market is going to move within a fixed period of time. You'll probably lose money before you're done, but your broker won't.

Investors rarely take notice of what they're paying for their accounts. The sales commission shows only on the slips that confirm your trades. You may not even look at them, let alone add them up.

Robert Syms of Syms Clothing Corp. in Secaucus, N.J., rarely looked. Then one day he noticed he'd paid $1,200 to buy 20,000 shares of an 89-cent stock nearly 7 percent.

"I don't mind paying commissions but this was a blatant case of greed," he says. "The words fleecing and gouging came to mind."

In Seattle, aviation marketing consultant Sam Peck thought too much trading was going on in his Individual Retirement Account.

"The broker always had good reasons why I should buy and sell," he says. But the excess trading turned out to have cost him around $40,000 in commissions and lost opportunity for market gains.

You're probably being gouged if you're paying more than 3 percent of your account value for commissions, interest on any margin loans, and fees, including annual mutual-fund fees.

That cost is much higher than it sounds. Say, for example, that you have a $10,000 account and it rises by 15 percent to $11,500. Three percent in total commissions and fees, taken monthly, comes to $345. That's 23 percent of your $1,500 gain.

If your account rose just 5 percent, the fee would eat up a huge 63 percent of your gain.

If you think your broker is underperforming or getting you to trade too much, you should hire a pro to check your account. Syms went to GreenTrak Inc. in New York City.

For $250 plus a $50 setup fee, GreenTrak will check how well your account has performed, minus commissions and fees. "Some people are being bamboozled," says president and former stockbroker David Green. "For example, the adult children of older people sometimes want to know if there's fraud going on."

Other people just want a financial summary of their accounts, to hold their broker accountable. Brokers are adding fees for every little thing, he says.

Peck went to Stock Broker Analysis in Naples, Fla. President Thomas Benson gives you a historical report for $375. You also get an estimate of what you lost by paying extra commissions rather than having that money invested.

Both firms will do periodic updates, to help you keep problems from happening.

Peck, for one, has given up on stockbrokers. He moved his money into a Vanguard no-load index mutual fund that follows the market as a whole. He pronounces himself a happy man.

Electronic deposits

If you're getting any government benefits Social Security, veterans benefits, welfare, whatever you can kiss your checks goodbye.

In a year and a half, the government is going out of the check-writing business. Instead, your check will be deposited electronically into your own account or an account set up for you.

Congress ordered the change last year as a money-saving move. The Treasury will propose a structure for the program within the next few weeks.

You may have resisted direct deposit in the past because you mistrust invisible payments. But the choice has been taken out of your hands.

The government estimates that switching to electronic payment will save $500 million during the first five years in postage and check-production alone.

Direct deposit also saves the cost of reissuing some 800,000 lost, stolen or damaged checks each year and saves you the 10-day wait when checks have to be reissued. Electronic payments get misplaced on rare occasions, but never lost.

Still, there's a rub. Some 10 million people who get government checks chiefly the poor don't do business with a bank.

So accounts will have to be created for them, and the question is the cost. How much should people have to pay to cash a Social Security or other government check especially low-income people who are barely getting by?

The law that mandates direct deposit says that the cost should be "reasonable."

Federal payments can be made only through federally insured institutions, but banks could hitch up with the check cashers as a lucrative way of dispensing the money.

If electronic payments go well, they will bring lower-income people into the mainstream of banking and credit rather than to the fringe services. The trick will be to keep the banks from charging too much.

Syndicated columnist Jane Bryant Quinn can be reached in care of the Washington Post Writers Group, 1150 15th St., Washington D.C. 20071-9200.

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