Stockbrokers And How To Use Them

If you want to trade stocks on the market then you have to use a qualified broker to do this. But they will do much more for you than just execute trades. They will monitor share prices, and provide advice to you on which shares to follow that have the potential of moving in the right direction. A stockbroker can offer you a wide range of services and they will charge different fees for these services. From a portfolio management service at the top end to advice and share trade execution at the other these are the main services offered.


It may be that all you want to do is buy and sell shares so a broker will follow your orders on this. The buying and selling service is available to novice and experienced traders alike but the broker will not provide any advice here. A small percentage of the total trade amount is usually charged for this most basic of services. Conducting trades is the most popular service offered by a stockbroker.


Second to offering basic trades is the provision of advice to investors. This will be more expensive than performing trades as the stockbroker is offering expertise of the market to help you decide on the best trades to make to turn a profit. You will receive a lot of the stockbroker’s time and assistance so you are clear on exactly what stocks are being advised and their profit potential. This is really important if you are a novice in share dealing and the payment will probably consist of a fixed fee plus trade commissions.


There are two types of portfolio management service which are advisory and discretionary. The difference is that with an advisory service, the broker will create a proposal of stocks that are considered a worthy portfolio but they will not act on this proposal until you instruct them to do so. With a discretionary portfolio service, the broker will manage all aspects of the recommended portfolio on your behalf and provide reports on how well this is working for you.



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