The Different Types Of Stock Market Brokers

2007-11-09 05:11:17

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When you plan to invest in the stock market, you will have to deal with a stock market broker who acts as an intermediary so that you can trade stocks in the marketplace. Stock market trading is a complex undertaking, and stock market brokers need to be licensed members before they can offer their services such as giving sensible and accurate advice and information to their clients.

There are basically three types of stock market brokers that you will encounter when you invest in the stock market. These are the full-service, discount, and deep-discount stock market brokers.

Full-Service Brokers

Full-service stock market brokers provide personalized service to clients. They also execute orders that you place through them. You can talk to them personally and ask for guidance about how to invest in stock market. The broker may recommend stock picks and advice when to buy or sell. However, full-service stock market brokers are more expensive than the other two types of brokers.

Discount Brokers

If you want to avoid paying commissions to the full-service brokers, you can choose the discount stock market brokers. Discount brokers only execute orders upon your request. They do not offer advice to their clients, but they would furnish you copies of research reports should you need them. Because you do not get any professional advice from discount stock market brokers, you save substantially in brokers' commission when you invest in the stock market.

Deep-Discount Brokers

Like discount brokers, deep-discount stock market brokers also take and promptly execute your buy and sell orders. They also charge minimum transaction fees. But while discount brokers charge on a per share or value basis, you can find deep-discount brokers charging flat rates per share without regard to the number of shares you buy.

Your choice of a stock market broker will thus depend on your trading needs.


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