Who Needs A Stockbroker?

If you want to trade stocks on the market then you have to use a qualified broker to do this. But they will do much more for you than just execute trades. They will monitor share prices, and provide valuable information on what they believe will be the next batch of movers and shakers in the market. Many different services are available from brokers now and they attract a commission or set fee arrangement. From a portfolio management service at the top end to advice and share trade execution at the other these are the main services offered.


If all you want to do is trade shares then a stockbroker will execute this for you based on your instructions and make the trade. The broker will help novice traders with jargon etc but will only execute the trade and not offer advice on it. This is generally the most inexpensive use of a stockbroker and they will often charge a commission based on the value of the trade. Buying and selling shares on behalf of investors is the most common service a broker will provide.


The offering of advice is the next most common service. Providing advice is a more costly service as it involves a lot of work from the broker and considerable expertise as you will be advised on stocks that will potentially make you money. The stockbroker will also spend time with you to make sure that you understand everything that is being recommended to you. This time spent will really make a difference and is likely to come at a one off price with commissions payable on any trades.


There are two types of portfolio management service which are advisory and discretionary. The difference is that with an advisory service, the broker will create a proposal of stocks that are considered a worthy portfolio but they will not act on this proposal until you instruct them to do so. A discretional portfolio management service allows your broker to decide what your portfolio will be and trade on it without requiring any decision making from you.



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