You will need the assistance of a stockbroker if you want to buy stocks and that stock broker has to be licensed to purchase securities on your behalf. But, you need to think about what type of stockbroker is ideal and good for you, before you go searching for one on the Internet or by your telephone for your closest broker-dealer.
Also, you should know that there are 4 basic categories of stockbrokers who are available nowadays, ranging from simple and cheap order-takers to the some which are more expensive brokers and who provide full-service as well, advice and recommendations and in-depth financial analysis: discount brokers with assistance, online/discount brokers, money managers or full-service brokers.
Basically those online/discount brokers are just the people who take orders and provide the slightest expensive way in order to start investing as there is usually no certified financial advisors or planners to help you and no office to visit. Via the internet or over the phone is the only interaction with an online broker. Usually cost is based on a per share basis or per transaction, allowing you to open an account with quite little money. Directly with just a few clicks an account with an online broker lets you to sell and buy options/stocks. And since these types of brokers offer totally no investment advice, any type of investment recommendations, you are on your own. Bear that in mind! Technical support for the online trading system is the only assistance you will get. But, online brokers usually provide investment-related research and resources, website links. This is the way to go if you want to learn how to invest without making a big financial commitment or if you feel you are well-informed enough to take on the duties of directing your own investments.
Discount brokers with help are mainly the same as online brokers, with the diversity being that they are expected to charge a very small account fee in order to pay for the additional assistance. But, this assistance is usually nothing more than providing a bit more resources and information in order to help you with your investing. They can be the same companies as your basic discount brokers/online that offer upgradeable services or accounts. But, they stop short of giving you any type of investment recommendations or advice. For instance, they may offer more in-house reports or research or with some investment tips – publish investment newsletters.
The traditional stockbrokers who take some time to sit down with you and get to know you financially and personally are full-service brokers. They look at factors such as: lifestyle, risk tolerance, marital status, personality, age, assets, debts, income and more. Then full-service brokers work with you in order to develop a financial plan which is best suited to your investment objectives and goals. Also, they can help with tax advice, estate planning, budgeting, retirement planning and any other type of financial advice. They can help you deal with all of your financial needs now and for the rest of your life, if need be. For those who want everything in one package these types of brokers are for them. Their cost is more than discount brokers in terms of fees, but the worth in having a specialized financial advisor by your side can be very good for the additional costs – usually accounts can be set up with as little as thousand dollars.