Full Service Brokers
Full service brokers provide valuable advice if you're willing to pay for itFull service brokers offer an array of services including stocks, bonds, annuities and insurance. Discount brokers provide some of the same services but don't charge high commissions. The commissions often seem so hefty that they have spawned a recent increase in do-it-yourself discount brokerages, where you can build a stock portfolio online without having to consult a broker. Your knowledge of investing and cost of investment services should factor into your decision when choosing any kind of broker service.
Consider the following when deciding whether a full service broker or discount broker will best serve your needs:
1. Full service brokerage firms versus discount brokers
2. What you have to invest with a full service brokerage, including commissions
3. The reputation of the full service or discount broker
Consider whether a full service brokerage will provide what you need
Factor full service broker commissions into your budgetWhether you choose a full service stock broker or a discount broker, you'll need know exactly what you'll spend by combining the commission and what you actually invest. If you think commissions for a full service commodity broker would be too steep but you still want to invest, discount brokers may be the way to go. If you are a first time investor, some discount brokers offer inexpensive services even if you have very little investment capital.
Pick a reputable full service brokerage company based on ratingsThe assortment of options are endless for both discount brokers and full service brokers. Pick a service with a solid reputation, especially if you decide on a full service brokerage firm where you'll pay heavily for the advice of the broker.
- Some online discount brokers offer phone consultations with professional stock brokers for a fee. Make sure you know what the fee is since it may be equal to the commission of a full service commodity broker.
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