It is absolutely appropriate that even though you can decide on your own investments you still need to take help from a stockbroker in order to execute the orders. You do not have to depend on their recommendation however it may be very helpful.
You can mark your own choices but then again you will still need their assistance to invest. There was a time when you had no choice about the type of stockbroker to decide on. There was only one type of broker, the complete service brokers, and they controlled the market.
The charges that they demanded for their services were very high but this was the Industry standard. This contributed to the concept that the stock market and stock market investment were beyond the means of the average person and only for the wealthy.
The primary loss of control of the market by these full service brokerages happened in 1975 and discount brokers arose. They charged a fraction of the fees the full service brokers did and as such were a huge hit on the market. They offered the same services but were reasonable to the average investor as the cost were considerably lower.
Another revolutionary innovation was the introduction of the internet. This was a great innovation as there was greater trading competence as an outcome.
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The overall influence of all the modifications on the stock market was that individuals now had access to a load of data that was never available to them before. It is an argument on the other hand whether these opportunities have in fact improved investments and made better investors.
In the case of individuals that do their exercise and look for the accuracy behind the hysteria the answer is yes. The investors out there can today pick the type of broker they need from the choice available.
There are actually four categories of brokers. These are;
- The discount/online broker
- The discount broker that offers guidance
- The complete service broker, and
- The money manager.
The discount/online broker is fundamentally an order taker. They normally don’t offer advice and will not tell you when to buy or sell a stock. There may be research offered and other related tools however the final decision of investment in the stock market is completely up to you.
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The variation of the discount/online broker that assists customers is the nest type. They do not offer full consultation services but will have more research than order taking positions. They will offer investing tips but most likely not recommend specific stocks. You are not totally on your own with this option but you will still need to do a lot in terms of deciding on the best stock investment.
The complete service broker will offer recommendations on particular stocks and the broker will also access your financial situation to define your requirements and investment options. This service is appropriate for the investors that do not have the time or knowledge in making their investment choices.
The money managers offer services for the investors with large investments. This broker will manage only momentous portfolios and will invest and then manage the complete account for a percentage of the assets under investment. This option can be expensive however very valuable in the long run.
Whichever choices that you pick you make sure it fits your purpose.
Disclaimer
This information is for Learning purposes only. We are indeed not financial mentors. It should not be considered legal or financial advice. You should consult with a financial advisor or other professional to find out what may be the finest for your individual needs and risk tolerance.
Please do your own research.
