| You may need to employ a broker to handle your | | | | to buy or sell a stock, they earn a set percentage of |
| investments depending on what type of investing | | | | the transaction. Many brokers charge a flat ‘per |
| you are looking to do. The reason for this is brokers | | | | transaction’ fee. |
| are able to buy and sell stocks on the stock | | | | There are two types of brokers: Full service brokers |
| exchange. The question many ask, is do I really need | | | | and discount brokers. Full service brokers can |
| a Broker to handle my investments. The answer is | | | | normally offer more different types of investments, |
| YES. If you are planning to buy or sell any stocks | | | | they may provide you with investment advice, and |
| you must have a broker | | | | they are usually paid in commissions. |
| Stockbrokers are highly qualified and are required to | | | | Discount brokers typically do not offer any advice |
| pass two tests in order to gain their license as a | | | | and do no research – they simply do as you ask |
| stockbroker. They are also usually required to have | | | | them to do. |
| some sort of background in finance or business, and | | | | So, the biggest decision you must make when it |
| have a Bachelors or Masters Degree. | | | | come to brokers is whether you want a full service |
| You must realise that there is a difference between | | | | broker or a discount broker. |
| Stockbrokers and Stock Market Analysts. A stock | | | | If you are new to investing, it would be advisable to |
| market analyst literally analyses the stock market, | | | | go for a full service broker so they can help you to |
| and their job is to predict how certain stocks will | | | | make good investments. They will be able to use |
| perform and what different stocks will or will not do. | | | | their skill in investing where you may not understand |
| A stock broker is only there to follow your | | | | investing at this point. Although if you have a good |
| instructions and buy and sell stocks on your behalf. | | | | knowledge of investing you will probably only need a |
| In most cases stockbrokers earn their money from | | | | discount broker to deal with your investments simply |
| commissions on sales. When you instruct your broker | | | | to make the trades on your behalf. |