Choice of a discount broker might seem to be an attractive option as you can save on the commission’s front. Though it might seem attractive working with them might not be a feasible option always. Even if you avail the services of the best online discount broker in India there are some drawbacks in availing their services.
Do it yourself module
The major loophole of a discount broker is that you are going to execute trading on your own behalf. It means all investment decisions are based on your own portfolio. A lot of time would be spending to undertake research about securities. At the same time you are going to have a major know how on how stock markets work and their mode of operation. Some people are equipped to deal with this, whereas others are not in a position to do so. To be successful in the domain of stock marketing you need a degree of education along with training. To develop your portfolio discount brokers are anyways not going to provide you with a lot of assistance. This has forced many investors to remain in the dark and deprived them of opportunity to earn money from the stock market.
Dearth of options
Another drawback in availing the services of a discount broker is lack of options from an investment point of view. Most of the discount brokers provide you with a limited basket of securities to choose from. They are going to choose mutual funds and popular stocks in order to purchase. Though this could be fine for some section of investors, some people want a large stock base and even might be considering certain specific investment types. If you are looking to save money from your broker, then you might be choosing from certain mainstreams investments at this point of time.
The benefits of traditional brokers
Though you could be spending a lot more money to avail the services of a traditional broker, you can seek in benefit from numerous ways. The main benefit that you can expect from such brokers is personalized services. In case of discount broker you are going to receive generic advice that was developed for the masses. With a traditional broker you might be able to sit down and glance through your portfolio. They are going to spring up some investment objectives with realistic targets which you need to gun for. Once you provide them with all basic information they are going to work with you in developing an investment portfolio. This portfolio is built upon certain risk tolerance capacities. The amount of risk you are able to bear is an important tool in this regard. For many investors this is a much valuable service as they are not aware about the financial markets. If you are planning to avail the service of a discount broker virtually you will be on your own.
To sum it up the choice of a discount or full time broker depends upon your investment portfolio.