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A full-service brokerage offers investment research, tax advice, and retirement planning in addition to providing trading services to clients. The transaction fee for a trade is on average several times higher with the full-service brokerage than with a discount broker, but the higher fee is necessary to pay a commission to the individual stockbroker working at the full-service brokerage. Critics of the full-service brokerage claim that the research, which is provided for free, is not worth the higher commissions. Sell-side research, as it is often called with the full-service brokerage that also engages in underwriting, is produced primarily to further the marketing agenda of the investment banking group. Along with a financial planner and CPA, the discount broker is a viable alternative to the full-service brokerage, without the conflicts of interest. Merrill Lynch is a leading full-service brokerage; other examples include Smith Barney and Morgan Stanley. The full-service brokerage is more often called a full-service broker.
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