Guide to Types of stock brokers: The term broker has been used to describe financial transaction agents since the 17th century. Brokers are part of a bigger category known as investment bankers, a group that is also not new. Investment bankers have been around since at least the Middle Ages when they were responsible for raising the monies necessary for kings and queens to wage war on one another. The adjective "investment" describing banker only means that the banker focuses on investment as opposed to other banker functions such as retail banking, which deals with such things as checking and savings for the general public.
Modern standards are substantially less dramatic and violent. A stockbroker today is a person who has passed a test called a Series 7 Exam administered by the Securities and Exchange Commission (SEC) and, as such, has the
necessary qualifications to buy and sell stock for his or her clients. A brokerage firm is nothing more than a firm composed of, you guessed it, stockbrokers.
The Securities and Exchange Commission (SEC) acts as the stock market police. The SEC makes sure everyone is following the stock laws, or securities acts, passed by the U.S. Government.
Full Service Stockbrokers
You can find full service stockbrokers at the most well-known and established companies, including
Salomon Smith Barney
Morgan Stanley
Goldman Sachs
Merrill Lynch
For all their eminent reputations, however, brokerage firms use a substantially different track for selling stock than the average investor would think. The company that uses the expression about making money the old-fashioned way—earning it—isn't lying. They just didn't specify for whom they were making that old-fashioned money.
CAUTION
A full service broker usually manages his or her client's account directly and charges the highest commissions.
Discount Stockbrokers
A discount broker provides his or her services piecemeal or a la carte. Discount broker clients are usually charged only for the services they use. In 1975, standardized brokerage prices were abolished by the gov- ernment. Prior to that time, buying a share of stock cost the same regardless of where it was purchased. The change in the law meant that brokers and brokerages were left to their own devices to determine how much their services were worth, and investors were finally free to decide how much they were willing to pay. That, coupled with the proliferation of information via the media and Internet along with the explosive growth of individual investors (we do talk amongst ourselves after all), led to the introduction of a whole new breed of brokerage, the discount brokerage.
Discount brokers all have one thing in common: You pay for what you get. In the world of full service brokers, investors are usually charged the same price regardless of how many of the brokerage's services they utilize. Most discount brokerages have a price structure broken down like a menu. If you want advice, it costs a dollar. You want to place your trade in person? That costs another dollar. The benefit to this, of course, is that if you already know which stock you want to buy, you will pay much less to simply place the purchase order than the investor who wants to sit with the broker for three hours discussing his or her options.
E-Brokers
E-brokers are completely licensed to provide all the services of a traditional brokerage online. E-brokerages accept trades 24 per day, 7 days per week, Be aware, however, that the order is usually retained until the physical markets open. The growth of the Internet threw a new star into the ring: the e-brokerage. These include companies like Ameritech, LBJ Direct, and E-Trade. Many of these electronic brokerages have grown to massive sizes in their few years of existence, verifying their popularity. The e- brokerages have many things going for them, not the least of which is their prices.
Educate yourself:
The irony of the brokers and brokerage houses is that they create the need for an investor to educate him- or herself further regarding money management. This is a good thing. Depending on what type of brokerage service you select, minimum or maximum, you as the investor are ultimately responsible for ensuring your money is being effectively managed and you are being appropriately charged. Whether that means researching the trade yourself or researching the returns from your professional's advice, you make the call. This is your hard- earned cash—make sure you know where every dime of it is going.
******Usman ahmed owner of this blog created this post with his knowledge.All content provided on this blog is not copied from any other blog and site and is for informational purposes only and The owner of this blog makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site.The owner will not be liable for any errors or omissions in this information nor for the availability of this information. The owner will not be liable for any losses, injuries, or damages from the display or use of this information.
Modern standards are substantially less dramatic and violent. A stockbroker today is a person who has passed a test called a Series 7 Exam administered by the Securities and Exchange Commission (SEC) and, as such, has the
necessary qualifications to buy and sell stock for his or her clients. A brokerage firm is nothing more than a firm composed of, you guessed it, stockbrokers.
The Securities and Exchange Commission (SEC) acts as the stock market police. The SEC makes sure everyone is following the stock laws, or securities acts, passed by the U.S. Government.
Full Service Stockbrokers
You can find full service stockbrokers at the most well-known and established companies, including
Salomon Smith Barney
Morgan Stanley
Goldman Sachs
Merrill Lynch
For all their eminent reputations, however, brokerage firms use a substantially different track for selling stock than the average investor would think. The company that uses the expression about making money the old-fashioned way—earning it—isn't lying. They just didn't specify for whom they were making that old-fashioned money.
CAUTION
A full service broker usually manages his or her client's account directly and charges the highest commissions.
Discount Stockbrokers
A discount broker provides his or her services piecemeal or a la carte. Discount broker clients are usually charged only for the services they use. In 1975, standardized brokerage prices were abolished by the gov- ernment. Prior to that time, buying a share of stock cost the same regardless of where it was purchased. The change in the law meant that brokers and brokerages were left to their own devices to determine how much their services were worth, and investors were finally free to decide how much they were willing to pay. That, coupled with the proliferation of information via the media and Internet along with the explosive growth of individual investors (we do talk amongst ourselves after all), led to the introduction of a whole new breed of brokerage, the discount brokerage.
Discount brokers all have one thing in common: You pay for what you get. In the world of full service brokers, investors are usually charged the same price regardless of how many of the brokerage's services they utilize. Most discount brokerages have a price structure broken down like a menu. If you want advice, it costs a dollar. You want to place your trade in person? That costs another dollar. The benefit to this, of course, is that if you already know which stock you want to buy, you will pay much less to simply place the purchase order than the investor who wants to sit with the broker for three hours discussing his or her options.
E-Brokers
E-brokers are completely licensed to provide all the services of a traditional brokerage online. E-brokerages accept trades 24 per day, 7 days per week, Be aware, however, that the order is usually retained until the physical markets open. The growth of the Internet threw a new star into the ring: the e-brokerage. These include companies like Ameritech, LBJ Direct, and E-Trade. Many of these electronic brokerages have grown to massive sizes in their few years of existence, verifying their popularity. The e- brokerages have many things going for them, not the least of which is their prices.
Educate yourself:
The irony of the brokers and brokerage houses is that they create the need for an investor to educate him- or herself further regarding money management. This is a good thing. Depending on what type of brokerage service you select, minimum or maximum, you as the investor are ultimately responsible for ensuring your money is being effectively managed and you are being appropriately charged. Whether that means researching the trade yourself or researching the returns from your professional's advice, you make the call. This is your hard- earned cash—make sure you know where every dime of it is going.
For The User
******Usman ahmed owner of this blog created this post with his knowledge.All content provided on this blog is not copied from any other blog and site and is for informational purposes only and The owner of this blog makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site.The owner will not be liable for any errors or omissions in this information nor for the availability of this information. The owner will not be liable for any losses, injuries, or damages from the display or use of this information.
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