(MONEY Magazine) – These are bleak days in the brokerage business: The junk bond market has collapsed, taking with it the leading underwriter of junk, Drexel Burnham Lambert, which filed for bankruptcy in mid-February. Brokerage giant Shearson Lehman required a $1 billion cash infusion from parent American Express. Layoffs are spreading throughout the industry, which has already lost 40,000 jobs -- or 15% of its work force -- since 1987. And the consolidation of firms that began after the 1987 crash is continuing. While these events may seem as remote from your own life as riots in Azerbaijan, you, along with other Americans, could end up paying a steep price for the financial industry's current woes. Brace yourself; Wall Street is about to present you with this bill: -- As an investor, you may be charged 10% more in commissions and face other fee increases as well. -- As a borrower, you may pay another $2,000 in fees on home-equity loans and an additional $5,000 or more on mortgage down payments. -- As a future retiree, you may face exit fees of 6% to 9% to escape from annuities issued by junk-tainted insurance companies. Here's a closer look at what Wall Street's troubles will mean to you:

INVESTING With income from takeovers and other speculative activities declining, brokerages will try to make more from small investors. If you have an account with a major firm, your commissions for stock trades could rise by as much as 10% by next year, according to industry executives. A typical 100-share trade of a $50 stock would cost an additional $10. Some brokerages have also instituted an even more obnoxious practice: fees for inactive accounts. Shearson and Paine Webber now charge $50 a year on accounts that have made no trades during the previous 12 to 18 months. At the same time, reductions in research budgets and analyst layoffs will make it harder to get reliable information about stocks that interest you -- especially if they are small, little-known companies. Brokerage firms will also have fewer brokers and assistants; if you have a small account -- that is, $50,000 or less -- you may have a harder time getting good service. If you buy mutual funds sponsored by a brokerage firm, examine all the fees. With investors rightly resisting old-fashioned sales charges of 6% or more, brokerages have been imposing less obvious exit fees and 12b-1 fees (for more on these pernicious promotional charges, see Money Update on page 24). Quiz your broker or financial planner to make sure you understand the fees you'll be paying.

BORROWING Lenders are much less eager than they were a few months ago to make mortgage, home-equity and other loans. Many large banks participated in junk- financed deals, and that market's debacle, combined with growing defaults on real estate loans, has made lenders more cautious -- even about mortgages and personal loans, such as lines of credit. Past promotional offers to waive a variety of fees on home-equity loans that can total as much as $2,000 have largely disappeared, says Keith Gumbinger of HSH Associates, a New Jersey firm that tracks mortgage lending nationwide. With fees rising, avoid taking out a home-equity loan if you possibly can. Most lenders are also increasing down payment requirements on first mortgages from a minimum of 5% to at least 10% of a home's price. That amounts to an additional $5,000 on a $100,000 house or condominium apartment. Further, lenders are scrutinizing potential borrowers closely, so take care to keep your credit rating unblemished. If you can, save for a down payment of 20% or so to help ease mortgage approval. With delinquencies on personal credit lines and other installment loans recently at a 10-year high of 2.88%, banks are not encouraging this kind of borrowing the way they did throughout much of the 1980s. If you have a bank line of credit, hold on to it. You may have difficulty re-establishing it or expanding it in the future.

RETIREMENT There's no need to panic, but review any retirement investments you may have that are sponsored by insurance companies. In the glory days of junk, Drexel and its competitors sold bonds to many insurance companies that are the issuers of annuities or the guaranteed investment contracts (GICs) that go into corporate retirement plans. If an insurer is pummeled by defaults on junk -- or on other investments such as risky real estate loans -- you could lose the interest due on your GIC or annuity. The fixed-income investment option offered to participants in the typical 401(k) or company savings plan is diversified among GICs from three to five institutions. Ask your benefits officer how many companies issued the GICs in your company's plan and what he or she knows about the insurers' financial strength. If you feel uneasy, switch those funds at your earliest option to a money-market fund in your 401(k). With annuities, ask your insurance agent to show you insurance company financial strength ratings by A.M. Best, and look for companies rated A or A+. Also, be suspicious of any insurers that, according to the Best information sheet, have been getting double-digit returns on their bond portfolios over the past five years. That may mean they are loaded up with junk. If you own an annuity from Executive Life -- which has 45% of its assets in junk bonds -- or another troubled company that has frequently been in the headlines, you may want to get out, even if you have to pay 6% to 9% withdrawal fees. If you do take out money, you should probably roll it over into another annuity; otherwise you will owe a 10% penalty plus taxes unless you are older than 59 1/2.