An overview about discount broker
A discount broker is an individual who goes on to provide trading services at a reduced rate of commission. The focus is on a robust platform so as to buy or sell shares. Even discount brokers are entrusted with the task of providing trading material that helps in the task of identifying stocks. But other forms of services that are not involved in broking like investment advice, market analysis are not something that you can expect from these brokers. In a way discount broker enables an execution as far as an order for a client is concerned but no form of advice is provided as far as trading is concerned. The superior levels of internet have paved way for the emergence of such brokers who are in line with the term of online brokerages.
The manner by which a discount broker differs from a full time broker
The discount broker differs from a traditional broker in a lot of ways. Yes you might come across trading services at the core of the business the difference arises in the form of
The discount brokers are known to charge a flat rate on per order. It is normally in the range of Rs 15 to Rs 20 per order. But traditional brokers might claim a percentage of the trade value in the form of a commission fee. It could be low from 0.10 % and increase to as far as 0.75 %.
Type of service
For a full time broker, the services might extend just beyond providing the traditional level of services. It goes on to include research, tax advisory, market reports to name a few. The systems for providing these services are manned by high end professionals or experts. It peps up the administrative cost of services whereby the price tag for the level of services is pushed higher.
When it is a discount broker they operate on a no frill model. The focus is more only on transactional services and the benefits are passed on to you in the form of reduced pricing. Many of discount brokers go on to conduct their services online. It leads to a decrease in cost with superior levels of accessibility.
If you happen to be a seasoned investor who is more than capable of conducting their own research you can choose a discount broker. But if you are new to the market and cannot track the market operations then a full-time service broker is an apt choice. The reason being that they have an inbound team of experts who are going to provide you with all information needed.
Last but not least customer service is really important when you end up choosing a discount broker. Direct communications in the form of web-based services like an online chat are really important. The traditional brokers on the other hand offer a mix of online and offline services when it comes to the customers. A host of services are employed by them.