|
|
|
The Different Types Of Stockbroker Services There are three basic types of stock-broking services available to the investing public: 1. Advisory Service – Any firm that offers advice to the public as part of an advisory stock-broking service must be registered and authorised by the Financial Services Authority (FSA). The FSA is a government body that is set-up to ensure that financial companies comply with the many regulations that ensure a fair and fraud-free environment. A company that offers an advisory service must ensure that any staff members that offer financial advice are adequately qualified to do so. A list of companies that are FSA approved can be found on the FSA website (www.fsa.gov.org). Obviously, most stockbrokers will charge a fee for their advisory services. Typically, the stockbroker will discuss your investment aims and objectives and then recommend a range of investments that they feel would best suit your needs. You can, of course, accept or reject their proposals. Advisory services tend to be done via the broker in person – either at their office, your home or over the telephone. 2. Discretionary Service - With a discretionary service, the stock-broking company will take a sum of money that you provide and invest this on your behalf. It’s significantly different to an advisory service because the stockbroker does not have to tell the investor about every trade that is made on their behalf – the stockbroker has a lot of “discretion” on how to invest the clients’ money. 3. Execution Only - As the name suggests, execution only trades are when the broker is simply instructed to buy or sell a particular investment. The broker has no say about the trade (even if they thought the stock was going to drop by 90% tomorrow they are not obliged to say anything). This is the type of service that has recently been made available to the masses via online brokerage houses that typically offer trades for $10 or so each.
|
Choosing A Stockbroker - An Introduction What Do You Need From Your Broker? The Advantages Of An Online Broker Account What Factors To Consider In Choosing An Online Broker
|