Types of Brokers
There are four basic types of brokers, they are:
- Full service brokers - those that offer you advice, research and other services.
- Discount brokers - these brokers simply execute your order. This can be done via email or by telephone. They offer no advice.
- Online brokers (sometimes referred to as discount brokers) - Investing online, (trading online), where individual investors and traders buy and sell securities over an electronic platform with a brokerage firm. This is usually the cheapest form of trading as not only are you making the decisions you are also executing a buy or sell order on the platform. This type of trading has become very popular in recent years with a wide variety of online trading platforms available.
- Combination brokers - A combination of trade execution service and limited other services.
The broker you choose should depend on your prior experience, the time available for you to trade and also how comfortable you are in making and placing trades.