A lot of people are confused with the term discount. It would mean an inferior level of service. There is a common saying in investment circles that you get what you pay for and this logic holds valid when it comes to the choice of the top 10 discount brokers in India. Yes you cannot deny the fact that quality does come at a high price and a testimony to this is that many brands in the market are costly because of the hefty labels.
As far as brokerage accounts evolve, the investors go on to dismiss the idea of a brokerage firm as they feel that they are not going to receive the same level of services as a branded company. Let us explore the reasons on why you have to choose a discounted brokerage firm over a branded one.
A lot of money would be filtered towards execution of trade
When you are opening an account with a discount brokerage firm it does not mean that you need to sacrifice with the quality of trade execution. As per study reports nearly 12 % of trade commissions are paid to the brokerage houses. The popular discount brokers in the business go on to spend a considerable amount of money on trade execution.
Not only it means that you would be saving money on trading fees when you are choosing a discount broker, a large percentage of what you are paying would be directed towards actual execution of the trade.
There is no need to sacrifice as far as the quality of trade execution is concerned
There are some reputed branded houses that go on to execute the orders directly; others go on to outsource their execution to the third parties. The price reduces considerably when you go on to avail the services of third parties.
As far as trade execution if you go on to avail the services of discount brokers, there is a strong possibility that they could be services of the third parties.
It is still possible to access trading and research software
There are certain investors who are of the opinion that the discount brokers would not be providing them with the research tools and making an informed choice as far as their investment decisions are concerned. To a certain degree it is true that there are some reputed brands in the business that go on to levy outstanding level of services. Once you are planning to open an account with a discount brokerage firm you need to be ready with certain basic information.
To conclude the key is to conduct a detailed research and be well ready before time. There is no need to choose a discount brokerage firm on the basis of reputation as your own specific needs come into play. Just check out whether they are members of reliable associations. Even if you have an account with a brokerage firm and are planning to switch some firms levy charges when you are planning to make a switch.