Types of Stock Brokers in Share Market
What is a Stock Broker ?
A stock broker is an individual or a company that buys and sells the financial securities on behalf of their customer or client. It makes the trading process easier for the investors and stock exchanges as well.
To invest in the stock market you need a broker. Normally people know about the term broker but very few of them know about the types of brokers. There are three Types of Stock Brokers in Share Market:
1. Full Service Broker
Full Service Broker Offers extra things like research reports , investment advisory , dedicated relationship manager. But here the fee and the brokerage fee both are high and you need to pay the annual charges as well.
For example :
* HDFC securities is a full service broker. It is a real time trade platform that helps the investors to trade and track the stocks. HDFC securities is the subsidiary and intermediary of HDFC bank.
* Motilal Oswal is another top full service broker. It comes with reliability , an investor can rely on their investments without a second thought about the money. Also they are very innovative when it comes to finance.
Now the second category is discount brokers.
2. Discount Broker
Discount brokers only offer trading platforms not anything else. Charges are very less as compared to the discount broker. But on every trade they charge brokerage. And people who trade on a daily basis or who trade more than their brokerage cost gets high.
For example : Groww is a broker that offers flat fee discount brokerage services. With help of such discounts an investor can easily invest in the direct mutual funds, equity, IPO(Initial Public Offering).
When it comes to the mutual fund platforms Groww is the first choice of the customers or investors. It allows the investors to invest in future options, do intraday trading etc. It helps the investors to plan strategically and achieve their financial goals.
And the last broker category is Zero Brokerage Broker for instance Shoonya by Finvasia.
3. Zero Brokerage Broker
In this type of brokerage, you need not pay any type of brokerage. Whether you are investing in stocks for a long time or doing intraday trading or doing options trading you do not have to pay the brokerage.
For example: Shoonay is a no-brokerage broker which means the traders don’t have to pay the account opening or annual charges.
And also an important thing is that Shoonay is SEBI(Security Exchange Board Of India) registered. Along with SEBI Shoonay is also NSE(National Stock Exchange) , BSE(Bombay Stock Exchange) , MCX(Multi Commodity Exchange of India Limited), NCDEX(National Commodity and Derivatives Exchange) or AMFI(Association of Mutual Funds in India) registered.
And one more important thing is that Shoonay has the NBFC(Non Banking Financial Company) license from RBI(Reserve Bank Of India).
Also, Check - Groww vs Zerodha: Charges & Features Compared
Role of Stock Broker
The stock broker plays a major role in :
Portfolio Management: Stock broker helps in portfolio management. It also prepares financial reports and generates financial advisory as well.
Research: Investing in stocks requires proper research. But research takes a lot of time therefore to save time and effort some stock brokers also offer analysis of stocks that helps the investor in making good financial decisions.
Transparency: Good stock brokers provide transparency to their customers about their prices like brokerage fee etc.
Securities Custody: When an investor buys an asset then the investor looks for security and safety of the asset. A stock broker is the person who is responsible for the safety and security . So a stock broker provides securities to the stocks or assets of the investor.
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How to Choose the Right Stock Broker
Consider the following things while choosing a stock broker :
1. Cost plays an important role in deciding which stock broker to pick. Before selecting the stock broker make sure to compare the brokerage fee and additional charges.
2. When it's about services then it depends on the investor whether to go for just trading or only needs advisory services.
3. Selecting the right platform makes the work easy for the investor. So choose the platform which is easy to use.
4. The reputation tells about the credibility. Therefore going with the right stock broker allows safer and trustable investments.
5. Last but not the least, see if the stock broker is SEBI registered or not. Because SEBI registration is necessary for the stock brokers.
Conclusion
A lot of things come into the mind of an investor while making investments. And the first thing is getting the right stock broker. So if you are an investor and looking for a right stock broker then read this article it answers all of your questions related to stock broker and types of stock brokers.
After writing content around various niches, I got aligned towards finance and started writing content that provides finance insights.
