WHICH BROKER DO I USE?
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Besides buying and selling securities for customers, brokers may
provide other services such as doing market research. Most people do not have
the time or resources to adequately research companies they consider for
investment. The broker can be of assistance. With vast resources, brokers can
provide investors with the "market intelligence" to allow them to make wise
investment decisions. Other people prefer to do it themselves.
? Full-service brokers research
investments and assist their clients with their investment decisions. For this
service, commissions compensate them on the transactions. Full-service
commissions are higher than commissions to brokers who do not provide research
? Discount brokers simply execute your trades. They
typically do not provide many other services. Discount brokers are compensated
with commissions on transactions. Their commissions typically are lower than
those of full-service brokers.
? Deep-discount brokers execute trades only. Because
their customers trade in large quantities regularly, they are able to charge the
Until recently, the divisions between these three services
were fairly clear and obvious. However, the growth of the Internet has changed
the rules. What has changed? That is the subject of the next