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The Process to Choose a Stock Broker

In the present year are you focussed more towards investing? Then you are at the right place as a discount broker can come in handy as far as investing is concerned. It would be fair on our part to say that they are the best share broker in India. A new era has entered and once you are planning to invest in stock market as they cease to be an agent between the market and a client. You can classify a stock broker into a couple of categories, a full time stock broker and a discount broker.

The full time service brokers

They are known to provide a gamut of services that includes advisory, commissions or research based inputs pertaining to the stock. Such type of brokers has an office from where they operate. They are going to charge a certain sum of money on the basis of trade that a client has executed. Some of them have gone on to provide customized platforms for the benefit of clients

But a major loophole with such type of brokers is the hefty price tag. This would mean a combination of fees and commissions. Now taking into consideration the perks along with high costs involved, a full time broker would not be that keen to be working with a small fund pool as they require a minimum degree of investment to operate.

You have to take into consideration the conflict of interest. Mostly a broker would be tempted to push for products that are going to generate viable commission.

Discount brokers

With emergence of the internet, the concept of discount brokers has come into prominence. They are aligned with online brokerages. In fact they are a category of brokers where the commission rates tend to be on the lower side.

But when you compare them to a full time broker they are only going to undertake trade execution and too much emphasis is not laid on research offerings, advice and for this reason low brokerage is offered. These brokers operate through online portals and hence their physical interaction with clients is at a limited level.

The main reason why people choose a discount broker is the low rates of commission. As no form of advice is provided and since they make money on the basis of buying or selling stocks, no form of unbiased advice would be provided by the clients.

Considering the flip side clients are not expected to be provided any advice or research inputs. This is a category of brokers that is more suited for people who have their own presence felt in the stock market and are well versed with the financial terms of the market.

The takeaway

If you do not have sufficient knowledge about the stock market, then discount broker is the right way to go. But for someone who is new to the market and do not mind in paying out extra commission then a full time broker would be an apt choice.