How to choose the right stockbroker service for your investment needs

Fsp Invest, 27 Jun. 2013

Tags: brokers, stockbrokers, execution-only stockbrokers, advisory stockbrokers, discretionary stockbrokers, investments, buying and selling shares, how to pick a stockbroker



When buying and selling shares, you’ll need a stockbroker to execute your trades. But, you need to know what the different types of services offered by stockbrokers are to choose the one that’s suitable for your investments needs. Here are the three types services you can choose from…


“Many investors feel comfortable researching, selecting and buying their own stocks, especially with the ease of buying afforded by the Internet. However, if time is a factor and you do not feel comfortable making investment decisions on your own, you can seek help from a qualified stockbroker,” says All Business.com.

But, do you know the types of services offered by stockbrokers and how to choose the one you need, should you decide to seek professional help?

Three types of services offered by stockbrokers explained

1.    Execution-only stockbrokers are only there to execute your buy and sell instructions when you place them. They won’t give you any advice on the shares. This is the cheapest option of the three services.

2.    Advisory stockbrokers will charge you a fee when you need their advice. Either they’ll have details of all your investments and give you advice on them as a whole or they’ll give you ad hoc advice on buying and selling individual shares that you suggest.

3.    Discretionary stockbrokers are the most expensive of the three services. A Discretionary stockbroker will buy, sell, advice and manage your investments completely. He’ll keep you informed on your investments and tell you what he’s buying and selling.

“You should choose your stockbroker depending on the amount of guidance and support you feel you need in the markets. For the most part though, an execution-only stockbroker will be fine,” advises Francois Joubert, Chief Investment Strategist behind The Resource And Scarcity Report.

After you’ve chosen your preferred stockbroker, you’ll be sent a Client Agreement Letter. The letter will outline the types of services you’ll be offered and the stockbrokers’ terms and conditions.

By understanding the different types of services offered by stockbrokers you’ll be able to choose the one that suits your investment needs.

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