| Cheap online stock brokers provide a valuable service | | | | Super Bowl Ads or would you prefer to pay less |
| to beginner and advanced investors. But what are | | | | commissions and use a discount broker? |
| the risks when you choose the cheapest broker | | | | 3. Limited Mutual Funds to Choose From. This |
| online? The biggest concerns for most people are | | | | is a big one. Mutual Funds are extremely expensive |
| the things they need to give up by using a less | | | | operate and maintain. They are also heavily |
| expensive broker. With the advent of the internet | | | | marketed (much like lead was marketed heavily in |
| and extremely low costs of operation, cheap | | | | earlier years even though it was killing people). |
| brokers don’t have to sacrifice much. Here are | | | | Running these funds require expensive managers that |
| the main features you’ll be missing out on by | | | | drive nice cars and probably have hair plugs. |
| trading frugally. | | | | Historically, mutual funds are among the worst |
| 1. No Physical Branches or Local Offices. More | | | | investments in the long run. Low cost stock brokers |
| established brokers, or brokers that have come from | | | | have access to index funds which are much cheaper |
| a traditional background, still have offices scattered | | | | to operate and don’t’ require the |
| throughout the country. These branches provide a | | | | aforementioned managers. Trust me, having a |
| means for investors to talk with someone in person, | | | | limited selection of mutual funds is a good thing. |
| pick up a check, or bring money into a local branch. | | | | 4. Online Customer Service. The cheapest |
| For most online investors these buildings seem like | | | | brokers will use technology to its advantage by only |
| antiquated relics of a more ancient system. If | | | | using email and chat. The service is still very good |
| you are reading this, chances are you have direct | | | | but you don’t have the luxury of talking to a |
| deposit, have an online checking account, are part of | | | | person on the phone. You will still be able to talk to |
| an online social network, e-file your taxes, and | | | | someone quickly and have your questions resolved, |
| correspond with blogs, Twitter, chat, and email. The | | | | you just won’t be able to hear their wonderful |
| idea of driving to an office, finding a parking space, | | | | accent on the phone. This is one of the biggest |
| waiting in a lobby, and talking with someone | | | | downsides to using low cost brokers. |
| face-to-face sounds like a colossal waste of time. | | | | What about safety? Are the cheapest discount |
| This isn’t to say customer service isn’t | | | | brokers secure? Can you trust their website with |
| important. Customer service is still very good | | | | your sensitive financial information? Yes, yes, and |
| among discount stock brokers, they just do it | | | | yes. Discount brokers use the same security and |
| differently. | | | | encryption as the big companies. Everyone in the |
| 2. No Massive Advertising Campaigns. If you | | | | financial secure uses encryption when personal |
| are looking for the cheapest broker don’t use | | | | information is being transmitted. If you are still |
| Super Bowl Ads to find them. The ROI isn’t | | | | concerned look for the Https:// in the browser ‘s |
| there for that type of advertising. Savvy internet | | | | address bar if you need verification. The |
| brokers advertise online. This article probably has | | | | ‘s’ in https:// means the page is secure and |
| advertising from said companies within viewing | | | | the data is being encrypted. |
| distance. They target the right audience with their | | | | So there you have it. Using the cheapest stock |
| advertising instead of using a bloated shotgun | | | | brokers requires giving up some things but if |
| approach to advertising. The question is this, would | | | | you’re okay with the things listed above then go |
| you like to have your commission fees going toward | | | | for it. Your wallet will thank you. |