Why You Need A Stockbroker

To trade on the stock market you must use the services of a certified stockbroker. These days brokers can offer more services than just buying and selling shares. They can track share prices, and provide advice to you on which shares to follow that have the potential of moving in the right direction. You can receive a number of services from a broker and you will either be charged a set fee or a commission for these. Brokers can perform trades, can offer you market advice and manage a portfolio for you.


For share trade only arrangements your stockbroker will follow your instructions to the letter and execute your trades. The broker will help novice traders with jargon etc but will only execute the trade and not offer advice on it. This is generally the most inexpensive use of a stockbroker and they will often charge a commission based on the value of the trade. Buying and selling shares on behalf of investors is the most common service a broker will provide.


Second to offering basic trades is the provision of advice to investors. Providing advice is a more costly service as it involves a lot of work from the broker and considerable expertise as you will be advised on stocks that will potentially make you money. 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 time spent will really make a difference and is likely to come at a one off price with commissions payable on any trades.


Discretionary and advisory portfolio management services are available from most brokers. 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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