Brokerage Account or Full Service Broker: Which Should I Go With?
You understand the importance of investing, but may not understand where to start. Two terms you may be wondering about is the brokerage account and full-service broker. What do these terms mean and which service is best for you? It actually depends on several factors. Let’s take a closer look at both to determine which you should go with.
What Is a Brokerage Account?
With a brokerage account, the investor calls the shots. You put money into a brokerage account and then decide which stocks will be purchased. In other words, it’s up to you to do all the research and decide which companies work best for you. While the brokerage carries out the transactions, the investor may still owe taxes in the form of capital gains. The advantage of a brokerage account is that it may be less costly than a full-service broker. Unfortunately, the time it takes for transactions to be carried out may vary.
What Is a Full-Service Broker?
Those that are terrified of investing may be leaning more towards a full-service broker. With a full-service broker, the broker gives advice, uses tools to see which stocks are performing better than others, and can help investors make the best decisions. Full-services brokers also offer services that go beyond basic investing. Full-service brokers often offer advice on taxes, retirement, and a number of other financial concerns. However, full-service brokers can be very expensive and some aren’t as trustworthy as others.
What to Consider
There are a number of things to consider when choosing between a brokerage account and full-service broker. Those that like to be in control, are more apt to choose a brokerage account. However, those that aren’t comfortable with the thoughts of investing may choose a full-service broker. Another thing to consider is how much money you have to spend. Full-service brokers can be very expensive, but do offer a number of great services. Last, but not least, you need to consider whether or not you’re up for searching for a trustworthy broker or whether or not you trust yourself to make the right decisions.
Which Is Best for You?
It’s hard to say. Some people like to keep up with financial trends, while others simply want to see a return. In either case, you do need to be knowledgeable about where your money is going. Research both options thoroughly before making the decision that works best for you.
Investing in your future is critical. However, it’s not always easy. The first step is choosing a brokerage account or a full-service broker, which can be frustrating. Thankfully, it’s easier to do once you realize what to expect from each service.