“Financial education needs to become a part of our national curriculum and scoring systems so that it’s not just the rich kids that learn about money. . it’s all of us. ” -David Bach
There are several different types of brokers which an investor can utilize. Broker types range from high end and expensive financial advisors to an online and automatic broker which is pretty cheap. Financial advisors are useful for people who lack the knowledge needed to invest in the stock market. It is definitely a bad idea to invest with out knowing investment basics and having a financial plan.
Brokers can work with you to educate you and give you options in your investments. Full server brokers work at a large firm that has access to an incredible wealth of knowledge and research. This is why they are so expensive. Online brokers are the cheapest because they charge almost no commission fees and you have to do your own research.
For each type of investor there is a particular type of broker that fits their needs and budgets. Below is a list of common broker types and a bit of information about each. It is important to point out brokers can be hired just to give advice and help you get together a plan. They do not have to be used for investment purposes after you feel confident enough to invest and research on your own.
The high price guys usually have research people working for them. They have an accurate picture of how the stock market is doing and are able to predict, to the best of their ability, what the stock market will do in the future. This type of advisor will suggest what he thinks is best in terms of your investment plan. Beware that often high price brokers will push stock that their own company has a stake in. Make sure your investment decisions are right for your and not just filling the pockets of your advisor.
The discount broker is someone who wants you to do your own research. He may or may not offer a list of stocks he feels are good investments. When you figure out what you want to invest in and how the you left the discount investor know and he will do the paper work.
Online brokers are pretty new. You can access online brokers through the world wide web. Brokerage websites offer access to a number of research databases, charts, graphs, and market tips. However, you are basically on your own. You buy and sell your stocks when you want to. There is very little interaction between you and the broker.
Online brokerage firms work well for some people because they can be access twenty four hours a day and 7 days a week.
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