But for larger investments, a full-service broker can cost three or four times more a difference of hundreds of dollars. In most cases, when you buy and sell securities you have to go through a broker, who gets paid by charging a commission usually based on the value of the transaction. Some fees are based on a multiplier as well as an add-on. Usually investors can save on commissions by going through a discount broker, but not always. That's pretty much universal.
Some firms have discounts that go beyond their stated rates.
A discount broker serves a niche for those who can pick their own stocks, do the reading and just need to trade, said B. Michael Bradley, senior vice president for Wheat First Butcher Singer, a full-commission firm. The main thing with a full-service broker is information you're hiring a consultant for your money. In return for lower commissions, investors give up the benefits of stock-picking advice and investment guidance. W.L. Lyons, a full-commission brokerage. Many brokerage firms purchase supplemental insurance.