Recruit the Right Broker: Discount or Online Firms
If you're the self-serve type, then this is the option for you.
A carefully selected broker can supply you with valuable investment information and make profitable investment suggestions.
If you feel comfortable making your own investment decisions and don't need or want a broker's advice, then there's no need to pay for such services. Instead, look for a discount broker.
Today the offices of the major discount firms, such as Charles Schwab and Fidelity Brokerage Services, are virtually indistinguishable from the offices of their full-service brethren, complete with stock tickers, libraries of investment information, all-in-one accounts, plush chairs, and computer terminals for checking on the value of your holdings.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
But here you get execution of your order — no research, no handholding, no advice. (Most firms do make helpful literature available, often including research reports from other sources, such as Standard & Poor’s, Value Line, and Morningstar.) Salespeople are paid a salary, not commissions. Most discounters also offer a long list of account services identical to those of the full-service brokers.
They can all save you money over the full-service shops. Which is best, though, depends on what you need. If the best price is what you’re after, you’ll have to look around to find it. But be aware that the firm charging the lowest fees may not be the best for other services you might want, such as issuing and delivering stock certificates (which you’d need if you wanted to enroll in a dividend reinvestment plan, for instance), or making mutual funds available with no transaction fees.
Many discounters are members of the New York Stock Exchange, with offices in several cities around the country. They have toll-free telephone numbers for distant clients, and most offer online trading. Discounts, depending on the size of the transaction, can amount to as much as 80% of what you’d pay a full-service broker, although 20% to 30% is a more representative saving. You can commonly save about 50% on transactions in the $5,000 range.
Some discounters operate through banks and savings and loan associations. The larger firms have walk-in offices in major cities. But before you sign on, find out whether there is a minimum charge. Some firms set a $20 to $45 minimum fee regardless of the size of the trade. On small trades, that could wipe out the savings you might be anticipating.
Online Brokers
A growing number of active investors are bypassing conventional brokerage offices entirely and doing all their trading online. The implications of this trend aren’t lost on the discount brokers who have jumped into the field with both feet. All told, a couple of dozen firms offer trading via the Internet.
The attractions of online trading are price and convenience. Commissions for electronic trading tend to be the lowest around. You can easily shop for the best rate and can make your trades any time of day or night just by sitting down at your computer.
Most firms will also let you trade by phone through a customer-service representative, though they may charge extra for that. Some full-service brokers have Web sites and offer information online but are reluctant to undercut their staff brokers by offering online trading.
Opening an online account.
It is simple enough to open an account with any broker by walking into the office, calling for an application, or submitting one online.
Before you sign up on the basis of commissions alone, ask about annual service charges. Some firms, wishing to limit their business to well-heeled investors, levy an annual fee to keep the small ones away. It’s important to shop around. A trade of one size may be cheaper at, say, Fidelity than at Siebert, while another transaction will cost less at Siebert than at Fidelity. A firm whose commission is calculated on the basis of the number of shares traded rather than the price of the shares should be cheaper for trading big blocks of higher-priced stocks.
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
-
RMD Deadline April 1: Five Tax Strategies to Manage Your 2025 Income
Taxable Income The April 1, 2025, deadline for required minimum distributions (RMDs) is fast approaching for retirees who turned 73 in 2024.
By Kelley R. Taylor Published
-
Rising AI Demand Stokes Undersea Investments
The Kiplinger Letter As demand soars for AI, there’s a need to transport huge amounts of data across oceans. Tech giants have big plans for new submarine cables, including the longest ever.
By John Miley Published
-
What DOGE is Doing Now
The Kiplinger Letter As Musk's DOGE pursues its ambitious agenda, uncertainty and legal challenges are mounting — causing frustration for Trump.
By Matthew Housiaux Published
-
A Move Away From Free Trade
The Letter President Trump says long-term gain will be worth short-term pain, but the pain could be significant this year.
By David Payne Published
-
Trump’s Whirlwind Month of Crypto Moves
The Kiplinger Letter The Trump administration wants to strengthen U.S. leadership in the cryptocurrency industry by providing regulatory clarity.
By Rodrigo Sermeño Published
-
What Could Derail the Economy This Year?
The Letter While the outlook for the U.S. economy is mostly favorable, there are plenty of risks that bear watching.
By David Payne Published
-
Three Ways President Trump Could Impact the Economy
The Letter Some of Trump's top priorities could boost economic growth, but others risk fueling inflation.
By David Payne Published
-
Europe Faces Economic and Political Headwinds Next Year
The Letter Challenges for Europe: Potential tariffs, high energy prices and more competition from China will weigh on the bloc in 2025.
By Rodrigo Sermeño Published
-
Don't Sleep on Japan's Economic Transformation
The Letter After almost three lost decades, Japan — one of the world's biggest economies — is finally showing signs of life.
By Rodrigo Sermeño Published
-
Start-ups Trying to (Profitably) Solve the World’s Hardest Problems
The Letter More investors are interested in companies working on breakthrough science to tackle huge societal challenges. The field of deep tech has major tailwinds, too.
By John Miley Published