Part 1: brokerage fee meaning
Part 2: types of brokerage
Part 3: brokerage fees
Part 4: fees viruses investing
Quick Pick :
Money that are charges by the public market broker to buy and sell the any kind stock securities is what known as fees for stock brokerage. The stock investor affect by brokerage fees, but the investors not been aware how much their life returns get ruined because of such small fees.
Stock broker doesn’t provide their service for free, but the people who used the right brokers based on their investing needs. Where helps them to take huge return on their investment over time. But investors who are not aware and under estimate their fees as small.
Would got impact on their investment portfolio later. So the information is available here to understand deep meaning for their brokerage. And how they act as broker and in what way does they charge their investor and how to choose your suitable broker for you and protect your investment over term.
Part 1: brokerage fee meaning
Brokerage means middle man for selling and buying the certain items.
And fee means charging the particular item for any service.
Brokerage fee means being a person for among investors to help them buy and sell their assets for certain fees.
The brokers are still today anywhere to help buy and sell anything for their alternative charges.
But fee might vary based on the product or service you sell or buy. But clearly we are not going to over look every brokers in the world but more importantly stock brokers.
Stock broker are the person or institution where helps the stock investors to buy and sell stocks at anytime anywhere in the world.
Moreover there is also the type of brokers in stocks market. They have different goals and objectives do their business. So let’s have a look what’s there’s type and difference.
Part 2: types of brokerage
Full service:
Full service broker means they would helps you through phone or direct. But their goal is to give you all the support 24 hours every time.
They could helps on wealth management and portfolio maintenance to minimize the risk on your investment.
Moreover the full service broker had also guide you which investment asset is best for you and more of it. More importantly they charge high fees because of their full service.
Discount broker:
Unlike the full service broker, the discount broker won’t gave any advice and support for 24 every time.
They don’t care about your investment where you invest and when you invest. Their core goal is to just give discount on their fees.
Brokerage charges are low when compared to other types of service brokers. Investor might got wonder what the difference in charge fee between full service and discount brokers.
So let’s have look what’s their brokerage fee would be. And before that let’s look of electronic brokerage.
Electronic brokerage:
The Electronic brokerage are online brokerage is not any different from discount and full service.
The online brokerage would be giving brokerage service through online is called online or electronic brokerage service, but they choose to be full or discount broker. So the online service could be given very less charge and affordable trading cost.
Part 3: brokerage fees
Percent of fees are vary depends on the type of broker you use. If you choose the full time brokers. They might charge nearly 2% or more.
Let’s say if you bought 100 apple share which is for 200 dollars. Your total investment would be 100×200 20,000 dollars.
The $20k of 2 percent 400 dollars on the commission alone. Which is you need $20400 for 100 apple shares including commission.
But when you choose discount brokerage, you might lack their support services and got charged nearly 0.4 percent.
Which is 80 dollars for 100 apple shares. Suppose once you choose the online brokerage they might cost you $5 to $30.
They would charge like fixed charge on you bought. It doesn’t matter how much you bought or sold. But online brokerage charge on fixed principal.
On the other hand all the brokerage charges the annual maintenance fee is which is from 0.5% to 1% of the total portfolio assets. Which also viruses the investing returns.
Part 4: fees viruses investing
Let’s say you have bought 100 apple shares of stocks at 200 dollars a share which is worth of $20k and you now sold the stock for 450 dollars after the 2 years.
Now you had 45,000 dollars in your hand. Which nearly more than one double. Suppose if you subtract the total commission including annual fees. You only end with $43k dollars.
Which is four percent of the return amount. But when you invest over decades the brokers charge more than 100k dollars in commissions.
Market rule: #100124
Stock brokerage fees are the commission that are charged by the broker for each transaction and size of the trade. Their is limit for charging fees for the investors in the manner of commission by the security and exchange commission.
If your registered broker charges more than a maximum charging limits, you could able to raise complaint against the broker firm.
And If your investors and not comfortable or align investing with based on market rules please learn about how to regulate your investments under your control with use of Rule investing.