Traditionally, the trading of stocks was done through telephones. But this concept had a lot of demerits which led to the introduction of information technology in the sector. The online-based stock market trading is trading with the help of internet technology. The investors can now buy the shares through various websites with no interventions from the humans. The brokers in India can be categorized into two categories depending upon the services which they are providing. To have the best trades and earn great profits the individuals have to take the services of the best broker in India.
• The full-time stockbroker: These are the traditional-based brokers were for all kinds of services and advisory nature services to the clients. These services may include trading in stocks, derivatives, mutual funds and many more financial products. These brokers also provide wealth management based services for corporate customers. These kinds of locals are based upon research-based teams who held the consumers and financial-based learning. These lockers also publish timely newspapers and newsletters in which they provide different types of tips and recommendations to the consumers. The service charges and the fees charged by them are very high in comparison to those discount brokers. They charge brokerage based upon a certain percentage of the trade value.
• The discount-based brokers: This concept is gaining a lot of popularity and provides some of the services at a very cheap rate in comparison to the full-time stockbrokers. These kinds of brokers are highly specialized in various investment options. These stockbrokers do not provide services like research and wealth management-based services. In India, the discount brokers work upon two plans which are the per trade flat rate pricing plans and the monthly and yearly plans.
Some of the points of differences between both are mentioned as follows:
• The charges charged by the discount brokers are fixed with no regard to the size and volume of the trade whereas, on the other hand, full-service brokers charge a particular percentage of the total value of trade.
• The charges of full-time brokers are always higher than discount brokers.
• The full-time brokers also charged the maintenance fees but the discount brokers do not charge this kind of fees.
• The full-time brokers have branches in almost all the major cities whereas the discount brokers are located only in major metro cities.
• The full-time brokers also provide research reports and training programs which are very much helpful for the beginners but this kind of service is not provided by the sound brokers.
• The full-time brokers also provide three in one account which is very convenient for the investors and helps in fulfilling the transactions in a seamless manner.
• Most of the discount brokers also do not provide 24 x 7 support of the phone to the consumers whereas the full-time brokers provide 24 x 7 support. Hence, various points of differences between both types of brokers in India have been explained.