With the growing market scenario, there has been a significant rise in competition between several business houses.
To sustain and grow such business to reach maximum audience and retain them, e-commerce plays a vital role. Usage of the internet in India is mounting rapidly along with the e-commerce. This has led to the foundation of a modern type of digital brokers, who are generally known as an online discount broker.
Here, the broker charges relatively lower commissions than any other business brokers. Hence, the broker here works effectively online. They don’t charge annually or for maintenance of their clients’ accounts.
Discount brokers offer fewer products and require fewer employees. Therefore, it’s becoming viral in India as the crowd of the country has access to the internet and indulges in quick and new money-making practices. As discount brokers involve less investment, it leads to less risk and better decision making.
Advantages:
Less risk on investment is one of the biggest advantages to the investors where they save a lot of prevalence on transactions. Usually, the immense amount of money is paid to the brokers of other businesses, but here the investor makes a less risk choice and therefore participates in better decision making.
Online discount brokers are safer and reliable in comparison to other brokers. Generally the most suggested brokers will be the large established online trading brokerage companies. The investment made is assured to be safer and helps in building a relationship based on trust and reliability between the company and the investors.
They offer a platform where the client makes his/her choice and facilitate the business their clients wish to make, and they make no counsel or suggestion on decision made. It is more independent and free-mind choice in order to make a healthy business environment.
Disadvantages:
Where there is an investment to be made, investors always look for advice on the investment they make. However, it is not practised by online discount brokers, and that is where few investors back out. Though there are several research tools, which can offset this disadvantage.
Here the investor options are restricted i.e.the investor can make several other investmentsin the business or other investment related to the business as with the traditional broker. Whereas, online discount broker aims and provides the service requested and might not allowmaking investments in other securities. This may critically affect the profits made in the long run in the business.
How to Choose A Discount Broker?
Fees:Select a discount broker that provides lowest possible price per trade
Other Rates:There are other rates other than the usual broker fees which may include the rates for closing an account, inactivity fees, charges for not keeping a minimum balance and few other rates too. So, it is best to know the rates and decide the appropriate broker.
Customer Service: While researching, it is important to be familiar with how the customer relation is maintained by the broker and what are the other brokerage offers given to the customer to enjoy the service.
Investment Product Selection: The discount brokers will offer a lot many options to invest the capital in. However, government bonds and corporate bonds are not available from every broker. So, it is important to select the service provided.
The internet has certainly opened doors for innovative opportunities for better business. The world wide exchange has made a majortransfer from the conventional method of trading to online bulk trade through brokers and partners. Previously, there has been a significant delay due to laying down stipulation for creating closed user groups (CUGs), and therefore, online trading entered late in India. Now, the issue is resolved, and the internet provides a vast platform for trading and business and hence, for a better business there has been a major demand for online discount brokers lately.