The positives along with negatives in availing services of a discount broker
Perhaps you might be aware the stocks you want along with investment decision. You might just need a viable platform in order to execute the orders in terms of buying or selling. If this is the case opt for a discount broker. They are not going to provide you any advice or even premium services, merely going to execute stock dealings on your behalf.
The best discount brokers in India as the name suggests are cheaper than full time service brokers. As you are seeking out information at your own end in the form of newsletters, journals or websites it works out to be relatively cheaper than engaging a full time service broker. If your choice is a discount broker you need to be aware of your personal goals or needs. The onus is on you to conduct proper research about varied stocks you intend to choose. Whatever be the outcome of the results you are forced to accept. In fact you cannot throw the blame on to anyone else as you are responsible for your own decisions.
Till a considerable point of time an investor had an option to choose from a couple of discount brokers. The conventional and internet discount brokers. But both of them are literally the same. With digital technology making rapid in conventional brokers have opt for an internet route. On the other hand internet brokers rely on face to face meetings and mobile based services.
The positives of discount brokers
As compared to full time brokers discount brokers have various advantages
- Lower cost- the costs are on the lesser side due to lower commissions. This is the main reason why people choose discount brokers
- Unbiased service- as no form of advice is given , discount brokers have no form of vested interest in trying to sell a particular stock
- Read information – Most of the discounted brokers offer educational material and tips on their website.
Things to keep a watch on
Yes availing services of a discount broker does have its pitfalls at the same time.
- No guidance- as the choice of a discount broker is made by an individual does not expect any guidance. The broker should clear these facts upfront. For a knowledgeable investor the lack of advice would be a blessing in disguise- no interference from outside world
- Hidden fees- the discount brokers might beat a trumpet claiming that they have the lowest fees. But fees are not the only way to mint money. Most discount brokers levy extra charges on the services they provide like mailing an email statement or sending you a share certificate.
- Customer service of limited capacity- When you are dealing with a discount brokerage firm gauge their customer servicing capacity. In case if you are not able to transact an order on their website, find out from where you can seek help.
To conclude these are the pros along with cons of hiring a discount broker. The onus is on your to choose one as per your needs.