A full service broker is able to offer you advice on buying and selling shares and other exchange traded instruments such as options and CFDs, provide market research and structured tailored investments for your long term portfolios. As a full service broker is able to offer many services you would generally expect to pay a higher brokerage fee to buy and sell financial products.
On the other hand a non-advisory broker, commonly an online provider, offers no personal advice or recommendations and only provides a trade execution service. Consequently you would generally expect to pay a lower brokerage fee to buy and sell shares, and they are a popular choice for investors who are confident in making their own trading decisions.
Whether you are an active private trader or a long term investor there are many questions that you may need to ask before deciding which broker will best suit your needs.
What type of services do you require from a broker?
Full service offering research and advice, access to investment opportunities in company floats, and financial planning or an online service accessed via phone or internet, offering low cost trading, and straight through order entry.
How much do brokers charge?
Typically brokers will charge a flat fee for transactions below $10,000 and then a percent value of the trade for higher amounts. Often discounts can be negotiated for high volume clients.
Are regular newsletters or share market information available?
Both full service and non-advisory brokers will often provide daily and weekly newsletters recommending sectors and stocks that are performing. These can be provided either by email or by access via the broker’s website.
Do Brokers conduct workshops?
Brokers will often provide workshops on how to use their execution platform, and trade in different types of financial products.
When you select a broker you should ensure that you receive a Financial Service Guide (FSG), a Product Disclosure Statement (PDS) and a Client Agreement detailing the products and services that are being offered to you, and the applicable terms and conditions of trading, by that broker before you open your trading account.
For more information about investing in shares and other investments, speak to one of the financial planners at Intellichoice today on 1300 55 10 45 or visit www.intellichoice.com.au.
