But, as you would expect, the heart of capitalism has evolved and adapted to changing market demands. The lines between full service brokers and discount brokers have blurred to the benefit of investors.
While it is still not always easy to fit each broker into a neat pigeonhole, you can make a general distinction by the services they offer.
Full Service BrokersAt the top of the service provider list are full service brokers. Full service brokers today have to be much more than order takers (why use them otherwise).
Companies in this category profess to offer a complete range of financial advisory services that extend beyond picking stocks to retirement planning and meeting other financial goals.
You pay a price for this service, but if you get a good broker they can help you chart a course for your financial future.
Discount BrokersToday’s discount broker is evolving into more than an order taker. There is a big slice of the market that wants something more than an order taker, but less than the handholding of a full service broker.
Many of these brokers offer investment advice, but short of the comprehensive planning you might get with a full service broker. They have excellent research resources available on their Web sites and robust online capabilities.
You’ll pay more than the deep discount brokers, but less than full service brokers. However, many investors find this middle ground very comfortable.
Deep Discount BrokersThese brokers resemble the order taker image of old, but even they have evolved with stronger online platforms and better customer service.
If price is your primary concern, this is the way to go. You may want to look at brokers in both discount categories to see what level of support works best for you.