Full Service Brokers

A full service broker means exactly that – full service. Some of you may remember the full service that service (gas) stations use to have years ago. The word “service” isn’t really associated too much with gas stations these days. Anyway, in a full service gas station you would pull up in your car, roll down your window and a nice, pleasantly dressed person would greet you with a smile. He/she would then ask you what grade of gasoline you would like. After starting to fill your tank, he would proceed to check your tire’s air pressure, check the oil and fluid levels under your hood, wash your windows and ask if there is anything else you required. Full Service.

This is the same kind of atmosphere that full service agents are creating for their clients, something expected and a step above the norm in this world where norm is expected. In their competitive efforts to be top dog on the block, full service brokerages have provided an environment of services that would make any client lightheaded with delight. These firms have products and services such as stocks, bonds, the brokerage’s own mutual funds, tax information and advice, options, futures, money market accounts, insurance, checking and savings accounts and most of all the always sought after advice and research which never seems to end.

This advice is delivered by squads of analysts and managers employed by these brokerages. They analyze, investigate and dissect trends, corporations, market sectors then produce investment reports to be distributed on a regular basis to their brokers and clients. Some of these analysts/managers have a heavy voice and large impact on various areas of the marketplace, as their investment reports sway, to some degree, how clients invest their dollars and where. Having the advantage and information available to their clients is the name of the game and this is where full service brokers shine. Shiny things usually come with a price and this is no exception. Higher commission costs are always adjacent with the extras of full service.

If your lifestyle demands that they do the work with you overseeing his tasks, then the full service is just what you are looking for.

 Discount Brokers

The definition of discount broker concludes more than paying less on commissions. Many veteran traders like discount agents because it fits their trading needs like a glove. Some traders feel more comfortable researching their own trades with the sense of being in control of their investing choices. These traders have a higher affinity with discount and online service. They will vary in their advice content from no advice to little. This is sometimes due to the liability of giving such advice and being accountable for it.

Many of these agents do suggest trading strategies and investments to help their clients but this is in a limited amount. Cost per trade will deviate from firm to firm but most keep in the same range so as to stay competitive. Traders may also pay more for orders other than market or limit orders, such as option spreads, short sales, covers and margin orders. Keep in mind that (even more so) with discount representatives, you are responsible for every aspect of your investments and trades. Ensure you know what is taking place with every trade and why.

You’re not going to be paying the expensive full service prices, but they are bit more than the online representative and in many cases it’s worth it. This is the middle ground for brokers and if you are up to doing some of your own research, this area can be very rewarding and can increase your financial knowledge to a marked degree.

 Online Brokers

The internet, as you know, has changed the world and the way we perceive it in all aspects of our lives. This is blatantly evident as the internet changes so does the business and economics of corporations, countries and the world. This could be good or not so good depending upon how you wish to view it and/or use it. The liabilities of online investing are fewer today than five years ago and many more traders are flocking to online brokers just because of the convenience it offers to the trader. As long as you have a computer and an internet connection – you’re in. Anything is possible.