TYPES OF BROKER
What are the various types of broker:
A broker is an agent or a firm which charges a particular brokerage fee for the services provided to its customer. The service can be provided through online or manually. In Indian stock market when an investor decides to initiate the process of his investment in trading then he/she came across which type of broker needs to be chosen.So in order to simplify this issue we will detail about two types of brokers that exist in the stock market:-
1- Full service broker: – These are traditional or regular brokers which help their investors to facilitate trade on behalf of their customer. Apart from trading they also provide wide range of services to their customers such as market research, investment planning, tax savings, and retirement planning etc. In return they charge hefty fees from customers which are around 0.2-0.5% according to the volume of trade. They are personalized brokers and mainly hired by the wealthy ones. Such type of brokers include Sharekhan, Angel broking etc and bank subsidiaries such as ICICI direct, Kotak securities, HDFC securities, Axis direct etc which provide trading facility, demat account opening along with trading.
2- Discount broker: These are pocket-friendly brokers which either charge nominal or no brokerage fee from their customers. They provide trading platform to their customers via online mode which is free of cost and by another means i.e call& trade service charging Rs 20 per call irrespective of the trading volume. Thus, it helps investors to make quickly and real time decisions. But these brokers neither provide any sort of investment and financial suggestions nor does any market research for their investors. This is a better choice for investors who are fee -conscious and are active in doing self trading along with keeping an eye on market fluctuations. The best discount brokers include Zerodha, Upstox etc.