Get Your Helpful Apps
When you are interested in investing in the stock market, one of the first things you will need is a reliable and affordable stockbroker. At one point in time, a stockbroker was seen as a very high-priced person who was extremely difficult to understand. In today’s world, stockbrokers have become much different, offering their services at a cheaper price and in a way that is easier to understand. This is an extremely wonderful change for the simple reason that you cannot trade in any way, shape or form without a stockbroker.
One of the most important rules on the stock exchange is that no one is allowed to trade on the exchange unless they are a certified stockbroker. With twelve million investors trading on the stock exchange in the UK, a stockbroker handles every trade that takes place and each and every one of them benefits from the services of a stockbroker.
You are probably wondering now, what exactly can a stockbroker do for me? There is a wide range of capabilities and services that any stockbroker can offer you, but also a range of fees that they will charge. Typically, a stockbroker will charge a commission, a set fee or a combination of the two. Regarding the services a stockbroker can offer you, there are three basic levels that include execution only, portfolio management and advice.
When a stockbroker only deals with the buying and selling of specific shares according to the instructions you give, this is often referred to as execution-only or, more mildly, trading-only. With this type of service, they do not offer you any advice on any action you wish to take. Typically, investors who are experienced or novice in investing will use this type of service. Execution only is cheaper and extremely efficient, the fees the stockbroker charges can range from £20 to hundreds of pounds, this will depend on the specific stockbroker you choose.
Portfolio management is extremely detailed and is the most expensive type of service performed, and dealing with advice is typically slightly more expensive than execution only, as the stockbroker will offer advice and insights into what is going on in the stock market. The stockbroker at this level of service will also take the time to explain anything you don’t understand.
Under the portfolio management service, you can divide them into two categories: advisory and discretionary. Under the advisory category, the broker will create a portfolio recommendation for you; however, they will not take any action without your explicit permission. Under the discretionary category, your stockbroker will fully manage all aspects of your portfolio and report to you on how the portfolio is doing as and when you need it.
