Should You Get A Full Service Broker or an Online Stock Broker?
There’s never been a better time to invest in the stock market, but the average person is lost when it comes to knowing where to invest. In fact, if you want true success with your finances, you need to find a seasoned professional who knows the ins and outs of the stock market. An experienced broker can mean the difference between great success and failure when investing your money.
But with so many brokers to choose from, how can you possibly know which broker to call? Below is a description of the different types of brokers to help you find the best person to bring a return on your investment.
Full Service Brokers
A full service stockbroker is the most expensive type of broker you can find. However, this type of broker does exactly what his or her title suggests. You’ll simply tell this type of broker your desired outcome and the broker invests your money using his or her current knowledge of the markets. While this is ideal for someone who has very little knowledge of the markets, it involves a certain amount of trust, as this person will be taking full responsibility for your investments.
With a discount broker, you’ll do the research work, suggesting to your broker where to invest. This type of broker charges a smaller fee but is also less hands-on. This is ideal for someone who stays abreast of the markets, but needs a professional to handle the fine details of investing. Online brokers are also often considered discount brokers, since they both offer a discounted service in exchange for the investor doing most of the research work.
Online brokering is gaining in popularity as easy-to-use sites attract day trading hobbyists. It’s important to do your research before choosing an online broker, since you’ll be taking the majority of the responsibility for your investments.
Online brokers simply provide a channel through which you can choose and trade stocks. With these sites, you’ll simply log in and start investing. The site will take a fee and you’ll receive statements on a regular basis. It’s important, when choosing an online broker, to make sure they’re licensed in your state of residence.
Whether you choose to go the full-service route or do some of the work yourself, research any company or broker you choose before investing any money. For many novice investors, the expertise of a full-service broker is well worth the extra fee.
However, if you can do your own research and make your own investment decisions than you should consider going with an online stock broker so that you can save on the stock commission fees, which can be substantial.
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