Why You Need A Stockbroker

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 can track share prices, and provide valuable information on what they believe will be the next batch of movers and shakers in the market. 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 commission is usually charged for this service and is often calculated against the total value of the trades that you want executed. Buying and selling shares on behalf of investors is the most common service a broker will provide.


The offering of advice is the next most common service. 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. The stockbroker will also spend time with you to make sure that you understand everything that is being recommended to you. 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. If you go for an advisory portfolio service, the stockbroker will create a proposal for you of shares that have a good chance of being in profit for you, then you have to decide what to do. 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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