What is mean by Full-service broker or Traditional Broker
Last Updated: Nov -16-2019
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The traditional brokers, also known as the full-service brokers have been an important part of the share market more than three decades now. Full-service brokers are completely involved, assisting you with multiple activities in addition to buying and selling stocks. Some of these activities include, overall financial planning, insurance, wealth management, portfolio management, research & analysis, along with providing investment tips and recommendations.
In this blog, we will know more about full-service brokers, the services that they provide, when to choose a full-service broker, how to find the best one suiting all your requirements, and a list of some of the best full-service brokers in India.
A good stock broker is required for all types of trading, and considering the fact that full-service brokers assist in multiple activities related to trading, they are usually the first preference for investors who want to stay active in the share market for a long time. The biggest advantage of finding a good full-service broker is that he will provide you with trading facilities that are mostly missed out, like market research, intraday tips, company reports, trends, and more.
Take a look at some of the leading Traditional Brokerage firms that let customers invest and trade in stocks, futures, options, currencies, and bonds in the Indian Stock Market.
|A/C Opening Charges||Rs.975||Rs.999||Rs.750||Rs.900||Rs.600|
|Demat AMC Charges||Rs.450||Rs.750||Rs.400||Rs.500||Rs.300|
|Equity Delivery||0.25% - 0.5%||0.3% - 0.5%||0.2% - 0.4%||0.25% - 0.5%||0.1% - 0.3%|
|Equity Intraday||0.025% - 0.05%||0.03% - 0.05%||0.02% - 0.04%||0.025% - 0.05%||0.01% - 0.03%|
|Equity & Currency Futures||0.03% - 0.05%||0.03% - 0.05%||0.02% - 0.04%||0.025% - 0.05%||0.01% - 0.03%|
|Equity & Currency Options||Rs.65-Rs.90 per lot||Rs.50 - Rs 100 lot||Rs.20-Rs.50 per lot||Rs.50 - Rs.100 per lot||Rs.20 - Rs.50 per lot|
|Commodities||NA||NA||0.02% - 0.04%||NA||0.01% - 0.03%|
If you are a new entrant into the share market, then all the features offered by a full-service broker shall be highly beneficial for you. However, if you are an experienced trader, you already know some tips and tricks of trading; hence, you may save some money by opting for a discount broker rather than a full-service broker.
Here are some more services offered by a full-service broker
- 3-in-1 account (trading, demat, and bank account), or 2-in-1 account (trading and demat account)
- Investment in mutual funds, IPOs, Systematic Equity Plan (SEP), bonds, government securities
- Offline and online trading
- Margin funding and margin against shares
- Personalized relationship manager
- NRI services
- Depository services
Generally, as full-service brokers offer an array of services, they tend to charge on the higher end. Their brokerage is also based on the volume of trading done. Let us look at the pros and cons of a full-service broker
Advantages of a full-service broker
- They have a PAN India presence. Clients may want to have face to face discussions and regular communication with the local broker. Therefore, a full-service broker has it all covered.
- They provide a wide range of services as mentioned above with complete assistance providing the latest trends and suitable advice
- They have their own highly qualified research teams who provide you all the necessary information of the stock market and the companies
- They assign a personalized relationship manager who can provide individual attention to each client and keep a check on their growth
- They offer an array of financial segments for their clients to trade or invest.
- They offer good customer service, faster turnaround time, personalized communications, and multiple channels to get in touch with them.
Disadvantages of a full-service broker
- As mentioned previously, full-service brokers tend to charge more brokerage because of the different services that they provide.
- They are most often dependent on the trading platforms provided by NSE and Omensys. Hence, there is less of innovation in case of trading platforms.
- Since more of the services run offline by the local sub-brokers, the full-service brokers fall short in offering efficient online services
- Sometimes they can suggest you to buy or sell stocks to fulfill their monthly targets, which can impact the financials of the client.
Now that you know both the positives and negatives of full-service brokers, you must realize when to choose a full-service broker for your trading needs. If you trading requirements match with the list mentioned below, then opt for a traditional full-service broker at the earliest.
- If you are a beginner in the stock market
- If you are a long-term investor
- If you wish to get personalized service from a relationship manager
- If you seek for advice and recommendations before investing
- If you want face to face interaction for most of your queries
- If you prefer to call and trade
- If you wish to invest into multiple financial options
Despite having all the knowledge about full-service brokers, you as an investor must also understand the specific expectations that you may have from your broker. You need to realize your trading motives and choose the type of broker that best suits them.
If you need any guidance or support in terms of figuring out the most suitable stock broker for yourself, we are here to help you.
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