All stock investors have one thing in common, whether they trade in penny shares or are long-term share investors; they all have to work through stock brokers.

When entering the world of the stock market, choosing a stock broker is your first priority and may be the most important choice you will make. There are many choices in stock brokers and you need to understand the key differences in each in order to better make your decision.

Traditionally, full-service stock brokers were the only type that was available. They charged very high commission fees but also gave a lot of help and guidance in choosing the right investments. In 1975, all of that changed and the discount stock brokers became the reigning champs of the investing world. In the last decade, the internet has permitted individual investors to research their own potential stocks for themselves, and even buy and sell stocks. There have been advantages to the arrival of the discount stock broker and online brokerage firm, but for some investors it has led to more mistakes in a smaller time. The key is doing your research and investing wisely.

On one end of the spectrum are the discount and online stock brokers. These brokerage firms act as order takers for their investors. The investor places an order on the telephone or online. The only help given is with the technical aspects of the website or the ordering process. There is no guidance given as to which stocks to buy, when to buy or when to sell. Many online brokerage firms offer their members access to stock market research, but this is provided by a third party. The account management tools help you understand how greatly you have invested and where it is going. These tools are generally online or downloadable. The discount and online stock brokers are for people either already familiar with the stock market, or those who do not have much money to invest. They do require that the investor spend some time researching and planning their investments. If you are interested in doing your own research or want to dodge hefty brokerage fees than discount and online brokers may be for you.

The next level in service is a discount or online brokerage with an assistance stock broker. The assistance stock broker will give a small amount of help. In online brokerage firms, the assistant stock broker takes the form of offering more research available and newsletters with investing tips. There is still a quantity of research that wants to be done by the individual investor, but these brokerages at least point their clients in the correct direction.

The traditional full service stock broker provides recommendations for specific shares that would be good for your portfolio. The stock broker analyzes your financial situation to figure out your needs. They put together an investing plan that is reviewed periodically and adjusted as needed. Fullservice stock brokers are an admirable choice for those who don’t have the time or the interest in staying on top of the newest economic news. The full service stockbroker does all the research for you and presents you with the best investments for your situation. Their clients are handled with awareness to special details and goals. This awareness does come with hefty commission fees, but considering the quantity of work and dedication that full service stock brokers give, these fees are understandable. Traditional full-service brokers make money based on the quantity of transactions they facilitate.

A money manager is one level up from a full-service stock broker in their level of economic services. Money managers (also called economic advisors) will work with clients to develop their total financial picture, which may or may not include investing in stocks. Money managers support stocks and bonds for clients. Each one has his or her own exclusive style and so it is important that you decide wisely to make sure your money manager has the same economic philosophy that you do. The money manager will give you a personalized service, an individualized range and ongoing management of your finances. Money managers charge flat fees based on services rather than on transactions. A professional money manager does not collect commissions on transactions. They are salaried from a percentage of the assets under their management. In that way, they are working for you and themselves at the same time. If your portfolio grows, their commission will grow as well.

P. Johnson, Investment Specialist writing for http://www.thearticleblogs.com

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