Brokerage Firms 101

Let’s start with the basics. In order for you to trade individual securities, like stocks or bonds, you must first open a brokerage account. Essentially, there are two kinds of brokerage firms which can help you with the task namely the full service brokerage and the discount online brokerage firm. In the former, you meet regularly with your financial advisor to handle your account. On the other hand, you can arrive at your own decisions when you opt for the latter.

Although brokerage firms have their own set of services as well as products, we can give you a summary of what one usually offers to their clients.

Services
Check-writing privileges
Investment advice
Investment information and tools
Margin loans
Online trading
Real-time quotes
Research
Touch-tone trading
Website account access

Products
An entire selection of traded securities and mutual funds

Payment
On top of the commission they receive from the companies they recommended to you, there are a number of financial advisors who charge an advisory fee.