Picking a broker is going to be a main decision when you decide to invest, as they are going to be taking a chunk of your hard-earned money every time you place a trade. So knowing the different services that these companies provide is just as important as placing the investments with them.
The two main types of brokers are full service brokers and discount brokers.
Besides the level of service that both types of brokerages offer, the type of investing style that you as an investor follow will also affect which way you should lean towards. For instance, if you hold short-term positions and make plenty of trades throughout the month, then it would only make sense to utilize the services of a discount brokerage in order to minimize your fees. On the other hand, if you are an investor that pours through years of financial statements, assesses the company’s strength, and looks forward in years, not months, then a premium brokerage could provide the extra information you need to qualify the decisions you make. They would give you the extra layer of professional information and knowledge that allows you to be convinced of your own work and comfortable to conduct your investment.
Whether you choose a discount or premium broker, be sure to fully understand their fee structure and the services they offer, this includes reading the small text with a magnifying glass.