There are different
types of investment brokers. They range from the full service
broker (which is very costly)
to the online broker (which is very cheap). If you are not
educated about stocks before you invest both types can be
very costly when you loose your money as a result of lack
of knowledge.
The full service broker charges the highest
fees and has a large
research
department,
which
makes
investment recommendations. The online broker in comparison,
usually charges the least in commissions, and in most cases,
requires that you do your own research. Below are brief explanations
of some of the most common types of investment brokers:
Full Service Broker:
Charges the highest fees, usually has an in-house research
team who researches and recommends stocks to buy. Sometimes
the stock recommendations are those their company specializes
in. This information is usually made public by the company.
In a full service firm you are given your own personal broker
who receives a commission for selling you the investment,
but on the other hand they can possess valuable knowledge
you do not have access to.
Discount Broker:
Gives you a discount in exchange for doing your own research.
You are usually given a list of recommended stocks to research.
Online Broker:
Is is the newest form of broker. Their service is run online.
You are given research, charts and investment news to research
your own investments. Recommendations of stocks to research
are sometimes given. They are usually the cheapest way to
purchase investments, but you must know investment basics
before you can use these services.
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