Retail investors often face a dilemma while selecting a stockbroker, as there are several stockbrokers in India, and they come up with two terms: Full-Service Broker & Discount Broker. The key difference between the two is the services they provide to their customers. In terms of benefits, full-service broker benefits are more than the discount broker.
The Indian market has the best full-service broker for long-term investment or short-term investment goals. We will discuss: what is a full-service broker? What are the features of a full-service broker? What are the services offered by a full-service broker?
If we have to define a full-time broker in brief: itis a licensed financial broker-dealer firm that offers several financial services to its clients, including research and advice, retirement planning, mutual funds, National Pension Scheme, insurance, IPO apply, derivatives, and tax-services, etc.
Of course, this all comes at a price, as commissions at full-service brokers are comparatively higher than discount brokers.
Full-service brokers can provide expertise for people who don't have the time to stay up to date on complicated issues such as equity market, tax or investment planning, insurance, mutual funds. However, for those who just want to execute trades without the extra services, discount brokers are the way to go.
It is advisable that you opt for the bestfull-time service broker instead of a discount broker because you will get all the expertise from the prior, and the latter will offer no financial advice.
You can select the bestfull-time service broker from the below list as per your investment requirements.
An investor can select a full-service broker or discount broker depending upon the requirements. But full-service stockbrokers have more advantages as compared to discount brokers.
Full-time brokers offer various financial services and products, including financial planning, investing, insurance, wealth management, portfolio management, research reports, personal recommendations, funding and margins on shares. They have branches and sub-brokers available in many cities for personalized services. They employ several researchers and analysts to produce reports on market and stock companies and do fundamental and technical analysis.
Since you are getting personalized recommendations and services, traditional full-service stockbrokers often charge higher fees, and the brokerage is a percentage based on the volume of trade. The brokerage is negotiable sometimes and goes low as your volume of trade increases. Should you prefer personalized advice and guidance, then a Full-Service Broker could be the right choice.
There are several features embedded in doing trading through full-service brokers and this can be reflected through the features of full-time stockbrokers:
Trading & DEMAT Account: You get 3-in-1 Account (Trading, Demat and Bank Account) or 2-in-1 Account (trading and Demat Account) at one place only and no need to open your bank & DEMAT account separately.
Diversify Your Portfolio: A full-service broker offers multiple options, such as investment in Mutual Funds, IPOs, Systematic Equity Plan (SEP), Bonds, Government Securities, and Gold Sovereign Bonds, etc., at one platform. This helps in diversifying your portfolio very easy. Additionally, you can opt for additional services like Portfolio Management, Wealth Management, and Insurance.
Offline and Online trading: Both methods of trading are available with full-time service stockbroker; it solely depends on you to select a trading mode.
Margin Funding and Margin against shares: Full-time service can lend you money to do your trading; they can provide leverage and margins on trading to investors to keep their trading pace.
Research Reports, Tips, and Recommendations: New investors do not know or possess less knowledge about the equity, debt, and insurance market etc. At this time, full-time brokers play their part and guide new investors for the trading, recommend them the stocks and mutual funds for investments. For the old traders, it provides charts and research reports for the equity market;stocks are suggested to them by the stockbroker for the long-term benefit or intraday.
NRI Services: Full-time service brokers offer NRI services to the international customers by opening their NRE & NRO accounts with them. This step benefits the dual party: international investors get a chance to invest in the international market and full-service stockbroker acquire a new investor.
Depository Services: allow investors to hold and transfer securities such as shares, bonds, equities, and mutual funds in electronic form.
Customer Support: There is no denial that the customer support of full-time brokers is proactive. They have several ways to listen to your grievances; you can reach them by telephone, email, social media and chat.
All these services come at a cost which you pay in the form of higher brokerage.
Firstly, an investor needs to understand that when he/she requires a full-time stockbroker; even traditional traders require the services of full-time brokers. It is advisable to select a full-service brokerage firm by considering the below points:
It is crucial for an investor (whether new or traditional) to utilize the services offered by the full-time service broker. The reason behind this notion is that the full-time service broker provides quality services, which assists you in building your portfolio. It is a two-way relationship: you can earn profits through their platforms by using their tips and recommendations, and the broker earns by charging brokerage from you. It is advisable to open your trading and DEMAT account with a full-time broker.
Last updated on 6th May 2021
A full-service broker is better than a discount broker. You get timely tips and recommendations about a stock or mutual fund from a full-service broker and not from a discount broker.
A full-service charges more brokerage from an investor because of the services provided by them to their clients.