Question

Brokers
With so much information available on the internet, why would someone choose to utilize a broker, when investing?

Answer 1

Although adequate information is available on the internet, broker plays significant role while execution of the investments. Roles and responsibilities of the broker while investing can't be ignored as broker helps investor to execute the trade, they act as the intermediaries for the investor to simply the transaction while making investment in various asset class. Broker primarily help their clients in buying & selling of the stocks.

They act as an agent between the investor and the stock exchange and charges a certain fees or commission from the investor for execution of their transaction. Along with the intermediaries, many broker provide customized research and investment analysis on the asset class to invest in based on technical analysis and historical trends.

Broker can be further classified into Discounted Broker and Full-Service Broker. A discounted broker help investor in execution of the trade on behalf of the customer who wants to invest in particular instrument and charges a fees/commission for their services based on the amount or volume of the traded transaction but they don't provide research services to the customer. Whereas Full- Service broker provide the research and investment advisory services to plan the portfolio through their stock recommendation to their clients along with the primary role of buying and selling of the instruments in the investment cycle. Some broker also provide portfolio management services to their clients by assigning the relationship manager to the user helping them understand their investing goals and objectives and recommend tailor-made investment solutions to their clients based on several factors such as risk-return preferences, time horizon of the investment and future goals/ objective of the investor. They guide their clients to achieve the financial goals of the investing.