This Blog is created to provide you with complete information about How to Choose a Broker and which one we should select according to our requirements.
Your choice of broker reflects your investment style—whether you lean toward active trading or a more passive, buy-and-hold approach.
Always make sure your broker is fully licensed by state regulatory authorities and FINRA and registered (individually or via their firm) with the SEC.
What is Broker ?
A Broker is an intermediary between an investor/trader and a securities exchange.
Security Exchange is the marketplace where financial assets are being bought and sold.
Because securities exchanges only accept orders from individuals or firms who are members of that exchange, so you need to choose a broker who can trade for you—means to execute your buy and sell orders.
Brokers provide that service and are compensated either through commissions, fees, or payment by the exchange itself.
A broker may just be an order taker, executing the trades that you, the client, want to make.
Nowadays, many brokers style themselves as “financial advisors” or “financial representatives”, and executing client orders, brokers may provide investors with research, investment planning and recommendations, and market intelligence.
Types of Broker
The discount brokerage firms are getting popular among the traders owing to their low, fixed brokerage plans wherein they charge a fixed brokerage fee irrespective of the trade value.
eg. Discount broking company Zerodha charges a low brokerage fee of Rs 20 or 0.03% per order on equity intraday. So whether your trade value is Rs 10,000 or Rs 10 lakhs, the brokerage charged will be the same.
Many retail traders wonder how discount broking companies charge low brokerage fees. It is because they work on a different business model.
They offer limited services at a cheaper price. They offer their services online and have a very limited physical presence which helps them to save money on employees and infrastructure.
A full-service broker (also called a traditional broker) is a licensed broker that provides a range of services to its customers.
Full-service brokerage firms offer their services both online and offline. They have branch offices in their area of operations, offer dedicated Relationship Managers (RM) to customers and employ a lot of people.
They have a dedicated research team that conducts technical and fundamental analysis and publishes various reports on stocks, companies and markets.
As they offer a range of services, the brokerage charged by them is higher than discount share brokers.
Before you choose a broker, you need to decide on the following factor :
– Do you have basic knowledge of how to trade ?
– Do you have time to watch the market every day?
– Do you spend daily fixed time analyzing stock watchlists?
If the answer to all the above questions is NO, then you should look out for a full-service broker which will provide the following services :
- Advisory Services
- Portfolio Management
- Research Stock
- Mutual fund
- Leverage and Funding
- Any time Customer Support
While If you’re already :
– Learning to trade/ already trading
– Doing your research self or taking tips from external sources &,
– Looking to save brokerage cost
Then Discount Broker is the best thing we can suggest to you.
We generally prefer to stick with Discount Broker ( We’re not promoting here any broker, what we have experienced, we suggest) but Some of the best brokers we personally using and experiencing include:
- For full-service broker : Angel Broking, Upstox
- For discount Broker: Zerodha( Best Order Execution) & Fyers( Best for chart analysis and execution ) [ Both are industry peers and the lowest brokerage in India ].
The discount broker provides:
- Charting platform
- call and trade facilities
- low brokerage
- customer support