One of the first decisions an investor has to make at the onset of investing is whether to use a discount or full-service stockbroker.

Understanding Investment Fees: From Brokerage Commissions to Sales Loads - NerdWallet

Discount brokers offer fewer services than full-service brokers and their fees are generally lowest. While discount brokers charge investors for each trade or each time they buy or sell a stock, mutual fund or bond, full-service brokers generally adhere to a fee structure that is based on the value of an investor's account.

Discount stockbrokers offer the bare bones of financial services. For a fee, they perform the buy and sell orders that investors place online. The field is highly competitive, and discount brokers often lower their fees in hopes of capitalizing on the volume of trades while capturing market share from their rivals.

Full-service brokers offer clients a fee-based service rather than charging for each individual market transaction. This approach is customary for stockbrokers who provide clients with access to research and educational sessions in addition to personal investment advice and performing transactions.

Full-service brokers charge clients a yearly fee of between 1 percent and 1. A financial adviser differs from a stockbroker. An adviser often becomes personally involved with a client's financial situation and provides advice on many financial matters, from which mutual funds to buy to managing an estate.

Traditional commission-based stockbrokers are increasingly becoming fee-based financial advisers, according to a "Wall Street Journal" article. The article points out that advisers charge higher fees for managing equities versus bonds, which could motivate advisers to invest more heavily in stocks over bonds.

If an investor does not read the fine print on his account documents, he may wind up paying hidden fees. If an investor fails to make a trade during a specific period, she could be hit with an inactivity fee.

These fees could be waived if the investor maintains an account balance above a certain threshold. Geri Terzo is a business writer with more than 15 years of experience on Wall Street. Throughout her career, she has contributed to the two major cable business networks in segment production and chief-booking capacities and has reported for several major trade publications including "IDD Magazine," "Infrastructure Investor" and MandateWire what are reasonable stock broker fees the "Financial Times.

Terzo is a graduate of Campbell University, where she earned a Bachelor of Arts in mass communication. Each week, Zack's e-newsletter will address topics such as retirement, savings, loans, mortgages, tax and investment strategies, and more. At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors.

This dedication to giving investors a trading advantage led to the audi stock market symbol lookup of our proven Zacks Rank stock-rating system. These returns cover a period from and were examined and attested by Baker Tilly, an independent accounting firm.

What are reasonable stock broker fees performance for information about the performance numbers displayed above. Skip to main content. More Articles Do You Pay a Stock Trade Fee to Buy and Sell? Do Brokers Charge to Sell Stock? How Much Does It Cost to Buy Stocks? How to Transfer Control of a Stock From a Full Investment Firm Online Investing Vs. Discount Brokers Discount stockbrokers offer the bare bones of financial services.

Full-Service Brokers Full-service brokers offer clients a fee-based service rather than charging for each individual market transaction. Financial Advisers A financial adviser differs from a stockbroker. Hidden Fees If an investor does not read the fine print on his account documents, he may wind up paying hidden fees. Full-Service Brokers The Wall Street Journal: Business Model Darwinism USA Today: Beware of Hidden Fees Online Brokerages Charge Smart Money: Best and Worst Brokers of Securities and Exchange Commission: Protect Your Money -- Check Out Brokers and Investment Advisers Bloomberg Business Week: Fee-Based Accounts -- A Poor Fit for Investors?

About the Author Geri Terzo is a business writer with more than 15 years of experience on Wall Street. Recommended Articles How Do I Get the Best Price on a Stock or Commodity Trade?

Related Articles The Advantages of Buying Individual Stocks How to Avoid Hidden Online Trading Fees How do I Create a Free Options Trading Account? Are Commissions Tax Deductible in Equity Trades? What Tax Do I Need to Pay on Stocks Bought Online? Money Sense E-newsletter Each week, Zack's e-newsletter will address topics such as retirement, savings, loans, mortgages, tax and investment strategies, and more.

Editor's Picks Covered vs. Noncovered Stock Transactions What Is an Escrow Receipt? Why Your Bank May Not Give You the Best Mortgage How to Trade Stocks Without Margins How a No-Claims Discount Works.

Trending Topics Latest Most Popular More Commentary.

10 Ways to Size Up a Broker -- The Motley Fool

Quick Links Services Account Types Premium Services Zacks Rank Research Personal Finance Commentary Education. Resources Help About Zacks Disclosure Privacy Policy Performance Site Map.

Client Support Contact Us Share Feedback Media Careers Affiliate Advertise. Follow Us Facebook Twitter Linkedin RSS You Tube. Zacks Research is Reported On: Logos for Yahoo, MSN, MarketWatch, Nasdaq, Forbes, Investors.

Logo BBB Better Business Bureau. NYSE and AMEX data is at least 20 minutes delayed. NASDAQ data is at least 15 minutes delayed.