Brokerage Firms vs. Online Brokers
Investors require the services of some type of brokerage firm in order to buy and sell securities. Traditional firms usually offer full service while online brokerage firms generally provide an investor with much more limited assistance.
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Function
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Both full service and online brokers allow customers to execute trades, move money, and gain access to quotes, investment research, and news. The main function of both is to carry out customer transactions.
Services
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A full-service brokerage firm will often supply investment advice and specialized research material, assist with financial transfers and transactions, and help with record keeping. Online brokers are more suitable to investors willing to do their own research and transactions.
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Cost
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The commission fees may vary greatly between the brokers but online brokers generally provide much lower rates.
Financial Planning
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A full service broker may get to know a customer, his needs, financial situation, and future goals through one-on-one contact, personal customer service, and face-to-face visits. Customers from an online broker are forced to do their own planning.
Warning
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Brokerage firms make their money by commissions and they often solicit business. They make money whether a customer makes or loses his or not. On the other hand, trading on one's own without any advice can cause great losses too.
Warning
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