In the stock market, one can find several service providers as far as the brokerage services are concerned. There are two categories in this field which are known as a full-service provider and discount service providers. The client should choose one that fits his requirement after considering the benefits and limitations of both the systems. The prime aim of any client is to go for the maximum profit from the market, but one must consider their limitations as well.
Employing a discount broker can be said to have gained popularity and is thought to be the well – accepted mode of investing in today’s financial world. As you hire the services of a discount broker, you will surely have some advantages, but there are a few problems associated with it. Below are discussed some pros and cons of using a discount broker.
Benefits of appointing a discount broker
The largest benefit that you will be getting by working with this kind of broker is that the fees or commissions will be very cheap. As you happen to buy regularly securities and stocks, you would not like to dole out more than you ought to. As you engage a full –service or traditional broker, they are usually going to take a hefty sum of commissions which you shall have to manage. This commission fee will be charged by way of percentage on the total volume of the transaction. Huge commissions may considerably claim a big chunk of the sum of your wealth that you take home in the market. In case you happen to be an individual who wishes to put in the regular sum of wealth on the intervallic basis at the set time, you would like to complete it at very cheap rates of fees.
One more benefit that you can derive by working with a discount broker as Zerodha review is safety. For a long time, in case a broker is in a capacity to afford low commissions, it will mean that they will be doing trade in bulk to make up for it. Normally, the best discount brokers are incredibly the big brokers in reality. By it is meant that your wealth will be in safe hands as compared to some small broker who is not well – known in the market.
Disadvantages
However, you may be capable of banking a considerable amount of money by appointing a discount broker; you will have to face some limitations of these discount brokers also. For instance, as is the case with a lot of the discount brokers, they leave all the decisions about investment up to the investor. They are not worried about what you are going to sell or purchase until you continue doing trade, i.e., selling or purchasing. Maybe you are in need of some help; you cannot get a lot of individual attention as you get from a traditional broker. In a lot of cases, they just provide a platform for online trading to you and usual information that is on their website for all people.
