Discount Broker vs Full Service Broker

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Investing in the stock market or equities is not possible without a broker who is registered with the regulatory authority and the stock exchanges, or you can say they are the only authorised entity to allowing various platforms for the people to invest in the various financial instruments.

Hence, if you are also looking to invest in equities or enter into the stock market to earn some extra money or create wealth by investing your money into listed companies in India, you also need to get in touch with the broker providing the booking services. When you explore the list of brokers you will get unlimited names and brands offering broking services in the stock market.

But here you need to understand which one to choose as there are two types of brokers operated I India. One is known as a discount broker and the second is better known as a full-service broker. Here, so you need to understand the difference between them and which one is best or can better help you in investing in equities or any other segment like commodities and currencies.

Also Read: Equity or Commodity which is better for Trading or more Profitable

To make a better understanding of the difference between full-service and discount brokers and which is a better between both of them we brought here a detailed discussion. You can go through this article and get to know more about discount brokers and full-service brokers with their key differences and advantages or disadvantages that will help you to choose the best one.

What is a Discount Broker?

A Discount Broker is a broking entity to provides an online facility to buy and sell orders at lower commission rates compared to a full-service broker. And usually discount broker also not performs the analyses and don’t provide any investment advice to their clients. They usually offer a trading platform for customers to simply put their buy and sell orders at discounted brokerage.

What is s Full Service Broker?

A Full Service Broker is like a traditional broker offering a wide range of related services like trading or investing facilities in the stock market, investment advisory, research and analysis into various segments like equities, commodities and currencies. A full-service broker is involved in various investment and broking-related services, hence offering well-diversified services to their customers.

Also Read: Equity or Commodity which is better for Trading or more Profitable

Difference between Discount Broker and Full Service Broker

Basically, the quantity of services between the discount broker and full-service broker is the key difference you can find between these two entities. However, one of the differences between full-service and discount broker is the rate of broking charges, as they both have their own criteria to charge the brokerage like fixed or flat rate on each transaction in percentage of total value.

Accessibility of Trading Platforms

A discount broker usually offers their broking services through online apps with no offline desk or offices to deal with end customers. While a full-service broker provides the best online trading platform integrated with various unlimited features. Apart from a web page they also have mobile applications to access or trade through various online cross platforms.

Types & Number of Service Offerings

Most discount brokers in India offer only the trading platform and some of the tools to add funds, buy and sell stocks or check your demat account through a mobile application. A full-service broker along with the trading facility also offers multiple other services like depository services, portfolio management, wealth management, investment advisory research analysis etc.

Representative Offices & Branches

Discount brokers don’t have multiple branches or representative offices in different parts of the country. They usually have only corporate offices and limited offices as they mostly asset their customers either through Chatbots or online customer support services. Discount brokers operate everything through their trading apps you will not find the offline offices or any branches.

Conversely, a full-service broker operates through multiple branches, they have representative offices, franchises and sub-brokers in different cities to provide an outreached service to their customers. Full-service brokers provide both offline as well online broking services through these offices and also assist their customers through these branches with online service.

Customer Support Services

Due to having only online services, discount brokers can asset their customers only through online modes. To solve your queries or avail of customer support service, you have to contact discount brokers only through their mobile application. They will assist you only digitally either through AI-backed Chabot or online customer support representative through phone call or email.

However, a full-service broker provides various modes of customer support to survive to assist their customers. Apart from online chat services, you can also call their customer support service anytime or reach the nearest branch to resolve your technical problems or solve trading-related issues.

Types of Customers & Investors

Discount brokers are suitable for the investors who are tech-savvy or have the technical knowledge and experience to operate the mobile-based application themselves without any help. Most of the investors or traders have knowledge and experience of trading and investing or can perform their own research and don’t need any advisory services can choose the discount brokers.

While, on the other hand if you’re a beginner and don’t know too much about trading or investing full-service brokers is more suitable. First they are providing research services to every client. Its helps them to take positions in the market randomly rather than doing their own research first. Traditional types of investors like the aged also prefer to choose the full-service broker, as they need assistance to perform their investing activities on their behalf.