Discount Broker
A stockbroker who carries out buy and sell orders at a reduced commission compared to a full-service broker, but provides no investment advice.
It used to be that only the wealthy could afford a broker and access to the stock market. The internet has brought an explosion of discount brokers which let you trade at a smaller fee. However, it is important to remember that discount brokers don’t provide personalized advice. Because of discount brokers, nearly anybody can afford to invest in the market.
For those who wish to do their own research or don’t want to invest a lot of money, a discount broker is an excellent way to invest.
Full Service Broker
A broker that provides a large variety of services to its clients, including research and advice, retirement planning, tax tips, and much more. Of course, this all comes at a price, as commissions at full-service brokerages are much higher than those at discount brokers.
Full-service brokers sometimes get a bad rap, but they can be extremely useful for their expertise. Remember, they do much more than just place trades; full-service brokers can provide expertise for people who don’t have the time to stay up-to-date on complicated issues such as tax or estate planning.
However, for those who just want to execute trades without the extra services, discount brokers are the way to go.
