Business & Finance

The positives and negatives of a discount broker

You could be having all the stocks that you want and could be making your own investment decisions. Just you might be exploring possibility of a convenient way to purchase or sell your stocks. For such situations you can search for the top discount brokers in India. They are not going to provide you with premium services or unsolicited advice. You might just need to be aware of the basics in order to perform transactions.

Pretty much like their name, services of discount brokers are easy to avail as compared to full time brokers. As you are making your own decision based on your own research inputs, be it a magazine or the internet their services are relatively cheaper as compared to a full time service broker. If you are planning to avail the services of a discount broker you need to take stock of your financial objectives and goals. The onus is on you to conduct an adequate research about the stocks you are planning to purchase so that good stock collections are made. Whatever be the course of outcome you need to be prepared in order to deal with it.

Till some time back, a regular investor had a couple of types of discount brokers to choose from. One works out to be the discount broker and the other an internet discount broker. But both of them operate on similar lines. In modern times most of the conventional discount brokers provide their own websites and on the other hand internet based discount brokers offer telephonic and even face to face services.

Things you can expect from a discount broker

As compared to full time brokers, discount brokers provide numerous benefits as follows

  • Lower cost- the main reason for a low cost is because of lower commissions and this works out to be the major reason to use discount brokers
  • Unbiased service- as they do not provide any form of advice, discount brokers do not have any vested interests in trying to make you purchase or sell a particular stock
  • Ready information- the established discount brokers do provide numerous educational material or even their websites are a steady source of information for a new or seasoned investor

Things to guard before you go on to avail the services of a discount broker

Yes availing the services of a discount broker does have its own pitfalls that includes the following

  • No guidance- since you have gone on to choose a discount broker, no guidance is expected. This fact a broker should make it clear to you. If you happen to be a knowledgeable investor then lack of advice could be a better option as it means minimum interference.
  • Hidden fees- discount brokers often claim that their fees are lowest, but in reality a different picture emerges. For them commissions are not the only way to make some quick bucks and hidden charges can be levied. For example mailing a monthly statement or even issuing a stock certificate could shell more money.

Last but not the least minimum levels of customer service are provided by such brokers.

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