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Brokerage
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Brokerage refers to a licensed firm or an individual (known as a broker) that buys and sells stocks for its clients. There are several types of brokerage: the choice of brokerage depends upon how involved the individual investor wants to be.
· Full service brokerage - provides research and advice to clients and sometimes, financial planning. This type of brokerage works for the investor with little or no inclination to spend time researching stocks. An example of a full service brokerage is Salomon Smith Barney.
· Discount brokerage - provides fewer services and has lower commission rates. With this type of brokerage, the client does more of the work. An example of a discount brokerage is Charles Schwab.
· Deep discount brokerage - usually only executes trades and offers no or very few other services. The individual investor is the most involved with this type of brokerage. An example of a deep discount brokerage is Scottrade. |
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