Difference Between Full Service And A Discount Broker

As an investor you have to choose between a discount and full-service broker is a very important decision to be made by you. It’s like choosing between a cost-effective product or go for a pricier but more service provider broker. Prior to deciding which one of these you want to choose and open an account with it would a wise decision for you to first better have a complete knowledge about the difference between the both types of brokers.

If you compare the things like opening balance requirements and service offered, brokerage cost and cost of investment and research tools you will find that Discount Brokers India are cheaper as they offer you just buy and sell services. On the other hand a full-service broker will offer you almost all the services that are related to stock market from trading in the forex market to IPO subscriptions but of course, he/she will be charging you accordingly then.

Traditional or Full-Service Brokers:

With a full-service broker, you can sell and buy Stocks, Mutual funds, ETF’s (Exchange Traded Funds), Bonds, SIP and various other investment products. Here are some of the features of a full-service broker:

  • Full-Service Broker is like having a fill service-oriented broker who will facilitate much more than buying and selling of stocks.
  • These brokers are like a complete financial advisor who will provide you all sorts of investment products like retirement and financial planning, tax advice and will guide you in maintaining a well-researched portfolio which Discount Brokers India will not offer for sure.
  • Since you have asked for recommendations on complete financial management these brokers will charge somewhere around 2-3% of your managed assets.

In short, if you feel like, you can’t invest your money yourself then it’s clear that you should take services of a full-service broker.

Discount Brokers:

An online or discount broker is arguably the best option for you if you can manage your funds yourself. Cost wise the online brokers are investor friendly as they hardly charge anything. Let’s discuss some of the characteristics of discount brokers:

  • Discount brokers will give you an online tool through which you can buy and sell yourself. They will though not offer any assistance in investing but will provide you some free education and research tools to make sure that you initiate your trades only after research.
  • In discount brokers too there are some types. As some might provide you only some basic tools and will charge just pennies for that while some will provide you with advanced tools but will charge a fess for that.
  • If you open your account with a discount broker then you will have to execute your trade yourself online and if you wish to trade over the phone then some brokers charge some extra fees for this service. However, only a few discount brokers charge an annual fee as most of them provide you a free AMC.

Now you can easily differentiate between the two and decide which broker you want to open an account with. Happy Trading!!

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