Stock Preacher

Discount Broker Advantage

Discount Brokers offer some significant advantage over full-service brokers, such as

Lower cost:

This lower cost is usually the result of lower commissions, and it’s the primary benefit of using discount brokers.

Unbiased Service:

Discount brokers offer you the ability to just transact your stock buy and sell orders only. Since they don’t offer advice, they have no vested interest in trying to sell you any particular stock.

Access to information:

Established discount brokers offer extensive educational materials at their offices or on their web sites.

What to watch out for

Of course, doing business with discount brokers also has its downside, including the following:

No guidance:

Because you are chose a discount broker, you know not to expect guidance, but the broker should make this fact clear to you anyway. If you are a knowledgeable investor, the lack of advice is considered a positive thing - no interference.

Hidden fees:

Discount Broker may shout about their lower commissions, but commission are not their only way of making money. Many discount brokers charge extra for services that you may think are included such issuing a stock certificate or mailing a statement. Ask whether they asses fees for maintaining IRAs or fees for transferring stocks and other securities (such as bonds) in or out of your account, and find out what interest rates they charge for borrowing through brokerage accounts.

Minimal Customer Service:

If you deal with an internet brokerage firm, find out about its customer service capability. If you cannot transact business at its Web site, find out where you can call for assistance with your order.

Popularity: 1% [?]

Perhaps you don’t need any hand-holding from a broker. You know what you want, and you can make your own investment decisions. All you want is someone to transact your buy/sell orders. In that case, go with a discount broker. They don’t offer advice or premium services - just the basics required to perform your stock transactions.

Discount brokers as the name implies, are cheaper to engage then full-service brokers. Because you are advising yourself, you can save on costs that you incur when you pay for a full-service broker.

If you choose to work with a discount broker, you must know as much as possible about your personal goals and needs. You have a greater responsibility for conducting adequate research to make a good stock selections, and you must be prepared to accept the outcome, whatever that may be.

For a while, the regular investor had two types of discount brokers to choose form: conventional discount brokers and Internet discount brokers. But the two are so similar now that the differences are hardly worth mentioning. Conventional discount brokers primarily conducted business through regular offices and over the phone, while internet discount brokers conducted business primarily through web sites. But through industry consolidation, most of the conventional discount brokers today have fully feature web sites, while internet discount brokers adapted by adding more telephone and face-to-face services.

Charles Schwab and TD Waterhouse are examples of conventional discount brokers that have adapted well to the Internet era. Internet broker such as E-trade, Ameritrade, Scottrade, and Thinkorswim have add more conventional service.

Popularity: 1% [?]

Online Stock Broker : Discount Brokers

Perhaps you don’t need any hand-holding from a broker. You know what you want, and you can make your own investment decisions. All you want is someone to transact your buy/sell orders. In that case, go with a discount broker. They don’t offer advice or premium services - just the basics required to perform your stock transactions.

Discount brokers as the name implies, are cheaper to engage then full-service brokers. Because you are advising yourself, you can save on costs that you incur when you pay for a full-service broker.

If you choose to work with a discount broker, you must know as much as possible about your personal goals and needs. You have a greater responsibility for conducting adequate research to make a good stock selections, and you must be prepared to accept the outcome, whatever that may be.

For a while, the regular investor had two types of discount brokers to choose form: conventional discount brokers and Internet discount brokers. But the two are so similar now that the differences are hardly worth mentioning. Conventional discount brokers primarily conducted business through regular offices and over the phone, while internet discount brokers conducted business primarily through web sites. But through industry consolidation, most of the conventional discount brokers today have fully feature web sites, while internet discount brokers adapted by adding more telephone and face-to-face services.

Charles Schwab and TD Waterhouse are examples of conventional discount brokers that have adapted well to the Internet era. Internet broker such as E-trade, Ameritrade, Scottrade, and Thinkorswim have add more conventional service.

Popularity: 1% [?]

Online Stock Broker: Full-Service Brokers

Stockbrokers fall into two basic categories: full-service and discount. The type you choose really depends on what type of investor you are. In a nutshell, full-service broker are suitable for investors who need some guidance while discount broker are better for those investors who are sufficiently confident and knowledgeable about stock Investing to manage with minimal help.

Full Service Broker

Full-Service broker are just what the name indicates. They try to provide as many service as possible for investors who open accounts with them. When you open an account at a brokerage firm, a representative is assigned to your account. This representative is usually called an account executive, a registered rep, or a financial consultant by the brokerage firm. This person usually has a securities license and is knowledgeable about stocks in particular and investing in general.

What Full Service Stock Broker can do for you

Your account executive is responsible for assisting you, answering question about your account and the securities in your portfolios, and transacting your buy and sell orders, Here are some things that full-service broker can do for you:

Offer guidance and advice:

The greatest distinction between full-service brokers and discount brokers is the personal attention you receive form your account rep. You get to be on a first name basis with a full service broker, and you disclose much information about your finances and financial goals. The rep is there to make recommendations about stocks and funds that are hopefully suitable for you.

Provide access to research.

Full-service broker can give you access to their investment research department, which can give you in-dept information and analysis on a particular company. This information can be very valuable, but be aware of the pitfalls.

Help you achieve your investment objectives.

Beyond advice on specific investments, a good rep gets to know you and your investment goals and then offers advice and answers your questions about how specific investment and strategies can help you accomplish your wealth building goals.

Make investment decisions on your behalf.

Many investors don’t want to be bothered when it comes to investment decisions. Full-service brokers can actually make decisions for your account with your authorization. This service is fine , but be sure to require them to explain their choices for you.

Popularity: 1% [?]