Be it any transaction in the stock market, to buy or sell, does require the interference of a stock broker. In order to choose a stock broker you need to figure out the basics of the stock market. Before making an investment there are a couple of brokers in the market, full time brokers or the top 10 discount brokers as both of them tend to have their pros along with cons.
Discount brokers are known to levy low commissions and hence low commission once you are purchasing or selling stocks. With low operation cost they are technological savvy brokers. A trading platform is provided to the brokers to execute trades but no form of advice is provided. Once you are using a discount broker you are on your own and there is no form of advice from any quarters. When you compare it to a full time broker the fees of a discount broker are 60 % cheaper that full time brokers. To all their customers free online trading is provided.
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Full time brokers
They are a kind of broker type who goes on to provide advice to the clients. From various branches they go on to operate in the country and if a client desires so they can visit them. Specialized services in the form of a dedicated customer relationship manager, portfolio services along with dedicated wealth management are provided to the clients. A major difference is the commission that is charged by a full time broker is a lot higher when you evaluate it with a discount broker.
The difference between a full time and a discount broker
There are various differences between a full time and a discount broker based on various factors.
The positives of a discount broker
- Low cost- first and foremost the low cost mainly arises due to low commissions once you compare it to a full time broker. This is one of the major benefits of using a discount broker
- Flat charges in terms of brokerage- be it a small or a large investor in the market, discount broker would levy the same charge. They are going to provide you with flat brokerage rates whether you purchase in 1 or 100 lots. On the other hand a full time broker levies a brokerage rate based on the volume you trade.
- No misleading information- a discount broker is not going to offer you any unbiased advice and force you to buy any stocks. Even they are not going to force you in buying any third party product. This means that the clients are not misguided.
Now there are some pitfalls with a discount broker as well. In this form of brokerage no full time relationship manager is provided like the case with a full time broker. If you do not have sufficient amount of time and need someone’s help in order to manage stocks then a discount broker would be the right choice for you.