What is a discount broker?

However, a discount broker does not provide investment advice or perform analysis on a client's behalf, unlike a full-service broker. 1 Before the emergence of better communications technology, only individuals with a far above average annual income could afford a broker and access to the stock market.

How much does it cost to open a discount brokerage account?

For example, an investor who decides on a typical discount broker can expect to open a regular taxable brokerage account (or retirement account) with a $500 minimum required amount. There is little or no commission charged to buy or sell most stocks, options, or ETFs.

What is a brokerage account?

A brokerage account is an investment account used to trade assets such as stocks, bonds, mutual funds and ETFs. There are two brokerage account options that meet the needs of most investors: online brokers and robo-advisors. Setting up a brokerage account is simple. You can typically complete an application online in under 15 minutes.

Should you choose a discount broker or a full-service broker?

Whether an investor opts for a discount broker or a full-service broker depends on their investing knowledge, market experience, financial goals, and current financial status. Since commissions typically take a healthy chunk out of investment and trading returns, some individuals opt to go for products offered by discount brokers instead.