Full-Service Broker

A full-service broker is a licensed financial broker-dealer firm that provides a large variety of services to its clients, including research and advice, retirement planning, tax tips, and much more. Of course, this all comes at a price, as commissions at full-service brokerages are much higher than those at discount brokers.

Full-service brokers can provide expertise for people who don't have the time to stay up-to-date on complicated issues such as tax or estate planning; however, for those who just want to execute trades without the extra services, discount brokers are the way to go.

Full-service brokers offer customized support and interaction in facilitating trades, managing portfolios, financial planning and wealth management services for clients. Clients are assigned to individual stockbrokers and/or financial advisors. They are the main point of contact at a full-service brokerage firm.

Stockbrokers are licensed professionals who manage client investments and administer financial advice to clients, and they are required to pass the Series 7, Series 63 and Series 65 exams to attain licensing. Brokers working at financial firms also need to be registered with the Financial Industry Regulatory Authority (FINRA). Licensed stock brokers are expected to be fluent in stocks, bonds and options.

It is important to distinguish between a stockbroker and a financial advisor. Stockbrokers are more geared towards providing securities products and transaction-based services, whereas financial advisors cover a broader range of services that include estate planning, financial planning and budgeting, insurance products and even tax advice.

Full-service firms have large research departments with analysts that provide proprietary detailed reports and recommendations for clients. They also have investment banking divisions that may provide certain accredited investor clients access to special financial products such as initial public offerings (IPOs), senior notes, preferred stock, debt instruments, limited partnerships and various exotic and alternative investment opportunities. This is one of the main advantages of full-service firms. Full-service brokers often have their own in-house line of products like mutual funds, portfolio management, insurance, loan services and exchange-traded funds (ETFs). All full-service brokerages provide physical office locations for clients to visit.

Clients of full-service brokerages appreciated the convenience of having a personal broker handle all their investment needs. It is a one-stop shop for investment and financial management. Most full-service firms provide online access and trading platforms. Self-directed investors tend to take advantage of these offerings. These platforms are loaded with fundamental research, order execution and technical analysis tools.