Full Services V/S Discount Brokers

Full Services V/S Discount Brokers


To start trading in the stock market, you need a stock broker and it is a necessity. The traditional stockbrokers are always there to take care of all your stockbroking needs. However, at present, there are also discount brokers who are game-changers. If you are new to the market and confused choosing between these two, here is an article which may guide you to your decision.

Who are the Full-service brokers?

A full-service broker is one who provides all kinds of services related to trading starting from Demat and trading services to research services, including huge exposure, advisory services, and trading platforms which are exceptional. Apart from providing trading facility across the general stock market instruments like equity, commodities, currencies, they also offer mutual funds, bonds, forex, insurance, and IPO services as well.

Who are the discounts brokers?

These are the new age brokers who just provide trading facilities for low brokerage amount. They provide a trading platform which is good to go and trading opportunity in the asset classes like equities, currencies, F&O, and commodities. One of the key advantage is that they do not have vested interest in selling a particular stock, leading to a neutral platform.

Now let us see how both are different from each other and which one is best for you:

Account types: With full-service brokers, you can get two-in-one as well as three-in-one account. However, with discount brokers, only two-in-one accounts are available.

Brokerage: The Full-service brokers typically charge commission on your transaction. They charge anything between 0.01% and 0.5% on each transaction. The rate varies according to the volume of the transaction. On the other hand, the discount brokers charge a flat fee of around Rs. 10-Rs. 20 per trade. So, if you are looking for low brokerage, discount brokers have the upper hand here.

Basic Services: Traditional brokers offer trading facility along with research and advisory and great trading platform whereas the discount brokers have no advisory or research department. Discount brokers’ basic service is to provide a trading facility. So, if you want to have research calls, reports for trading, you may go for the traditional brokers. On the other hand, if you are proficient in market-research, you can opt for discount brokerage.

Network: It is needless to say that the traditional brokers have the widest network across different cities and even countries while the other one has limited branches.

Customer Relations: Traditional brokers have customer service departments separately and entertain face to face meeting as well. The discounts brokers aid the customers online.

So, the choice between the two majorly depends on the services you want. If you are prudent in stock research and do not need research and advisory services, then discount brokers are good for you at the low brokerage. If you want an advanced trading platform with a various financial instrument to invest in full-service brokers are best for you.