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since they have to be licensed (meaning that hopefully they know their stuff), they can be valuable to many investors who do not have the time or the inclination to do their own research. But as most things in life, you get what you pay for. And in this case the price comes in the form of high commissions. For every trade you make, your broker will charge you a commission depending on the amount of money involved and the number of shares traded. You can expect to pay between $200 to $400 for each trade but in return you get the personal service.

Remember that your broker is only paid when you trade, so be on the lookout for those brokers who may engage in churning (advising you to continuously trade in order to maximize their commissions). Also be careful of pushy brokers who may cross the line of advising into peddling. If you want to use a full service broker, you should definitely start with reputable brokerage firms. It's the only way to be sure that you would receive quality brokerage service for your money. Some examples of full service brokerage houses are Merrill Lynch, AG Edwards, Prudential,Morgan Stanley Dean Witter, and Salomon Smith Barney. Full service brokers are sometimes referred to as traditional brokers as they have been around for just about as long as stocks have.

Discount Broker - If full service brokers are a little expensive for your taste or you don't need any TLC with your investment, discount brokers are the way to go. You certainly do not receive the same personal service as with the full service brokers here.What you do get is one or a group of brokers that you can contact to place orders with. You may have access to some data and analysis with these brokers but that is where the service ends. You are pretty much on your own, with little or no guidance. Commissions can cost from $70 to $130 per each trade depending on the size of the trade. Some examples of discount brokers are Schwab and Waterhouse. Many full service brokerage firms may …