You might be aware of the stocks you want and can make your own investment decisions. Just you need a convenient platform where you can buy and sell. Hop on to a discount broker. They are not going to provide you with value based services, but just a basic aspect on how to conduct transactions. Discount brokers pretty much as the name implies are cost effective to engage than a full time discount broker. Since you are advising yourself, obtaining information from various sources or investors you can save money on not to engage a full time broker.
Availing services of a discount broker is a straight forward process as there are fewer things involved. When you place orders these traders are bound to execute it on your behalf. Just you might have access to the personal platform where you conduct trades and no personal interaction occurs. The broker will process orders and execute transactions on your end. The best ones in the business make the process friendly and simple.
In case if you have decided to work with a discount broker take stock of your personal goals or needs. The onus is on you to conduct proper research in selection of stocks and outcome depends upon your decisions.
The things you can derive from a discount broker
Apart from discount brokerage discount brokers provide you with a host of benefits as follows
- Lower cost- the main result of lower cost means commission are low. This works out to be the main benefit of using a discount broker.
- Information access- if the brokers are established they provide extensive research based materials at their websites or offices
- Unbiased service- as they do not provide you with any advice a discount broker is expected to provide you with unbiased service
Yes, getting into a business deal with a discount broker does have its own pitfalls. They include
- No guidance- as you have availed services of a discount broker does not expect any guidance. The broker is expected to clear this fact. If an investor is knowledgeable lack of guidance is a positive aspect which means no interference.
- Hidden fees- A discount broker may claim low commissions, but this reveals one of the ways to make money. Discount brokers go on to claim charges that are not included like emailing a statement or a stock certificate to be issued.
- Minimum degree of customer service- In dealing with a discount broker firm evaluates their customer service capacity. In case if you cannot go on to transact business on their website, you might need assistance with your order.
To conclude the difference between a discount broker and a full time service broker are obvious. It would be difficult to differentiate among them, but most of the top brokerage firms offer a combination of both services. The onus is on an investor to choose what they want. At a later date if you want you can change level of service.