If you are thinking about getting started investing, there are a lot of options to choose from. Depending on your needs as an investor, you should choose the right type of brokerage for you. Your choice will have an impact on both the services you get as an investor, and the prices you will pay to invest. Here is a quick breakdown on the options for investors who are just getting started.
The most popular choice for beginning investors is using a discount brokerage. These brokerage firms usually conduct their business online, and require you to make all the investment decisions on your own. If you are planning on investing in simple mutual funds and ETFs that follow the stock market, this is an easy way to get started.
Prices for trading at a discount brokerage are also usually the cheapest of your account options.
Discount Plus Brokerage
There isn’t really such a thing as a discount plus brokerage, but it is the category term I use for discount brokerages that offer a lot more services than the basic ones. These are brokerages that offer desktop trading platforms and other tools to allow you to trade and research stocks and other investment vehicles. This type of company is geared more to the advanced individual trader, but the great thing is that the prices are typically close to a regular discount brokerage.
Full Service Brokerage
The last option is to get a full service brokerage account. This is the most expensive option, because it gives you a financial advisor that will help make investment decisions for you, or with your consent. It is the most expensive because you are paying for the assistance of a professional. This is a great option if you are looking for professional advice, or would like someone to look at your portfolio as a whole.
Some companies offer all these types of accounts to customers. For example, Alpari’s trading companies have these features available to all investors, you just pay for the services you use.