Full service brokerages firms provide buying and selling advice along with other services such as market trend analysis, market news and personal telephone services twenty four hours a day, six days a week. Discount brokers do not provide advice and some of these other advanced services. They simply provide a means for performing buying and selling transactions, along with a platform in which to perform these transactions.
There is a distinct difference between full services brokerage firms and discount brokers beyond the services which include affordability. If you are an experienced trader and do not need the expensive advice from a full service broker then the discount broker route would be ideal for you to perform your investments. If you are not an experienced trader then a full service brokerage firm maybe best to help you with your investment decisions. Benefits Consultant
Full service brokerage firms charge a commission based on your investment spreads whereas a discount broker charges a fee per transaction. So if you buy stocks then with a discount broker you pay for that particular buy transaction no matter how much you buy. The same applies to selling transactions. This is not true with full service brokerages since they get their commissions from the buying and selling spreads.
Some discount brokers will charge extra for stop limit, stop losses and other transactions that go beyond the simple buying and selling transactions. This is true also for full service brokerage firms. All firms charge different amounts for these types of activities so it is best to find out in advance what these fees and charges will be so you do not have any surprises when the time comes to perform one of these activities.
Discount brokers and full service brokerage firms alike have minimum opening balance account amounts. So it is extremely important to understand what these minimum amounts are and whether there are additional fees associated with your trading account such as account maintenance fees or other charges based on amounts. Insuring your trading fees are equally as important from both types of brokerages because in today’s market any could be in jeopardy of going out of business and you want to protect your funds.