Choosing a broker isn’t totally different when you are choosing a stock. It all begins in knowing and understanding your investing style. Today, traders are given with more options than before.
What exactly are Brokers?
Basically, there are two kinds of brokers and these are the regular brokers and the full-service brokers or also called as discount brokers.
In regular brokers, these are the people who are directly dealing with clients as well as brokers. They are resellers who work as middleperson between a big broker and client.
Generally speaking, these regular brokers have higher position compared to broker-resellers. That is not to say that all the resellers are bad.
It is just that you have to check with them before signing up. Regular brokers are oftentimes members of a recognized and well known organizations including but not limited to:
- SIPC or Securities Investor Protection Corporation
- FINRA or Financial Industry Regulatory Authority
Discount or Full-Service Brokers
There’s a fine line between discount brokers and full-service brokers. As what the name implies, a full-service broker is routinely offering recommendations and individual advice. And you need to have deep pockets to use this service. Discount brokers however will leave traders to have their own decisions.