Serving as a middleman between the stock market and investors, Stock brokers make the investment process easier and streamlined. Through their assistance, investors can select securities like shares, ETFs, and mutual funds. Moreover, their services allow investors to invest in the selected securities without any kind of inconvenience. Investors must select a responsible and reliable stockbroker who can deliver the best services for investment. One can find two types of stockbrokers i.e. Discount brokers and full-time service brokers. Each broker is known for its separate features and advantages that make a complete understanding of their services necessary for informed selection. The following article explores the difference between full-time service brokers and discount brokers helping investors to select the best that fits their requirements.
1. Full-time service brokers
As evident from its name, full-time service brokers or not to deliver an extensive range of services that help investors with the investment process. Delivering portfolio management, investment research, advice, and guidance services, full-time service brokers assist clients at every step right from opening a demat account to selection and investment in the best securities.
Following are the advantages of selecting a full-time service broker
- Hasslefree and convenient demat account opening process
Investors can open demat account with complete convenience through the assistance of a full-time service broker. Delivering a dedicated application, trading account, and other efficient services, investors get access to all the necessary services that can help in opening a demat account from the comfort of their homes. They even handle all the necessary formalities and paperwork concerned with demat account opening and identity verification.
- Research and advisory services
Investors receive detailed market research, recommendations, market insights and other efficient services which can help with informed stock selection and investment. They even guide investors at every step, offer stock recommendations and export personalized investment guidance services.
- Personalized services
Investors even receive personalized investments and other advisory services like wealth management, retirement planning, and tax consultation.
2. Discount brokers
Discount brokers, on the other hand, focus on delivering investment assistance services like delivering access to a dedicated demat and trading account for investment. They do not deliver advisory or research-based services and only offer trade execution solutions without access to full trading and research tools for fundamental and technical analysis. Despite their limited services, discount brokers are known for their efficiency and minimal brokerage expenses which passive investors tend to prefer.
Advantages of discount brokers:
- Low brokerage fees:
Discount brokers charge low brokerage fees as compared to full-time service brokers. Some discount brokers charge a flat fee for delivery and intra-day trades making them an obvious choice for investors who prefer payment of low breakage fees.
- Access to a reliable and faster trading platform
Investors even receive access to a faster trading platform which is free from additional technical tools and charts which passive investors may not require for their daily investment process.
- Ideal for active traders
Discount brokers serve as an ideal choice for active traders who opt for intraday trades. With access to a reliable trading platform and low brokerage fees, daily traders opt for discount brokers and their efficient services.
Conclusion
Investors therefore must make an informed decision and select the best stock broker depending upon their preferences and training requirements. An investor looking for low brokerage fees can opt for a discount broker. On the other hand, investors seeking complete investment advisory services and access to investment tools must opt for a full-time service broker.
