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Choosing a Stockbroker

  1. Should I choose a Full Service Stockbroker or an Online Stockbroker?
  2. Can I use both a Full Service and an Online Stockbroker?
  3. Is the choice entirely mine?
  4. Do I need a stockbroker near me?
  5. Should I just choose the cheapest stockbroker?

Should I choose a Full Service Stockbroker or an Online Stockbroker?

The key to making the correct choice is first answering the question, what services do I want? It is only when you have a clear understanding of the services you want that you’re in a position to begin the process of choosing a stockbroker.

If you’re after personalised advice, you’ll need a Full Service Stockbroker.

If you’re comfortable making your own stock selection and portfolio construction decisions and simply require trade execution services, an Online Stockbroker is likely to be the right choice.

If your requirements are more complex however, for example

  • you’d like personalised advice for your main portfolio, but would also like to trade stocks based on your own research, or
  • you’d like to make your own decisions but would like access to research

the right solution requires further investigation into the exact services provided by individual stockbrokers and their firms (that’s where we can help).

Can I use both a Full Service and an Online Stockbroker?

Yes. There are many investors who utilise the services of both a Full Service Stockbroker and an Online Stockbroker.

Is the choice entirely mine?

In most cases the client will have the choice, but not always. The reason is that the cost for a Full Service Stockbroker to service a client is significantly higher than the cost for an Online Stockbroker to deliver its services. All businesses accept new clients on the basis that they expect the relationship to profitable for both parties in the long-term. Stockbrokers are no different. In the case of Full Service Stockbrokers therefore, this means they are likely to focus on clients with larger amounts of money to invest in order to ensure this is the case.

There is no universal definition for ‘larger amounts of money’ however, and it is sometimes the case that a Full Service Stockbrokers will accept a client with a smaller amount of money to invest. It is worth understanding the differing cost structures of these businesses however, in order to appreciate why a Full Service Stockbroker may not be able to provide his/her services to you.

It is also the case that while one Full Service Stockbroker may be unable to offer his/her services to you, another will. There are several reasons for this but they mostly relate to how many clients the stockbroker already has. A more experienced stockbroker is likely to have less capacity to take on new clients, while a stockbroker that has joined the industry more recently is likely to have greater capacity to accept new clients.

The advice often given to someone starting out is that the best stockbroker for beginners is an Online Stockbroker. This may be the case, but is a generalisation that isn't always correct. As explained above, the right answer is unrelated to the years of experience an investor has. It is determined by:

  • The services required by the client; and
  • The assets the clients has available to invest

Do I need a stockbroker near me?

If I choose a Full Service stockbroker, do I need a stockbroker near me? Not necessarily. The answer to this question relates to how you wish to engage with your stockbroker. If you want to visit your stockbroker in person, then it makes sense that your stockbroker is located near you (which of course we can help with). If you are comfortable engaging with your stockbroker via phone, email and other digital technologies, there is no need to be located close by. It is quite common for stockbrokers to have clients located all over the country these days.

Should I just choose the cheapest stockbroker?

If you have shares to sell and no ongoing need for the services of a stockbroker, finding the cheapest stockbroker in Australia makes good sense.

Price should be a function of all investment decisions, but it is the relationship between ‘price and value’ that is most important. So for investors with ongoing requirements, rather than focusing on fees first, the best approach is first determine the exact nature of the services you need, then find the stockbroker that can deliver these to you at the best price.

Determining the cheapest stockbroker in Australia is not necessarily straightforward. The answer depends on the nature of the services the investor needs. To sell $10,000 worth of shares, Firm A may charge less than Firm B, but if the client wishes to trade ten times per month, they may find Firm B offers better pricing. Similarly Firm C may have higher commission rates or charges a greater overall ‘funds under advice’ fee than Firm B, but as Firm B doesn’t provide personalised advice, the lower commission rate of Firm B is not relevant to that investor.


To continue the process of finding the right stockbroker, read What is a stockbroker?

Or click here to find the stockbroker that’s right for you