What is a Full-Service Broker?
A full-service broker executes trades for clients, but also provides research, advice, retirement planning and tax assistance.
How Does a Full-Service Broker Work?
There are two general categories of brokers: discount and full-service.
In contrast to a discount broker, who only executes trades for customers, a full-service broker also provides service and expertise in wealth management services -- such as tax assistance, retirement planning and investment advice. This expertise can be extremely useful to investors with complex financial situations.
Why Does a Full-Service Broker Matter?
The expertise of a full-service broker allows you to outsource decision-making to the broker when you don't have time to stay updated on complex issues like estate planning and tax preparation. But the benefits and peace-of-mind provided by a full-service broker comes via higher commission than a discount broker.
Discount brokers are often the better choice for investors who perform their own research and don’t rely on outside guidance. Discount brokers are also a great choice for active traders because the commissions are much lower (hence the name, discount broker).
With the prevalence of online trading, low trading commissions, easy-to-use interfaces, and a broad range of educational materials are almost all that any trader could need.
With that in mind, read on to learn which online brokers should more than satisfy the needs of most investors in our featured article: 6 Low Commission Brokers that Make Our Cut.