This post is dedicated to our dear friend James, who always supports buying individual stocks over investing in Mutual Funds. I did some research this past week and I found some great information on self serve discount brokerage firms.

The difference between a full service and self service brokerage firm is that a self serve discount brokerage firm is totally independent for investors.  We are able to process our transaction online or by phone with no consultation or advice from an investment advisor.  A full service brokerage firm has an investment advisor who actively manages our investments. They can take our investment orders, or (if we allow them to) they can trade on our behalf.

US Brokerage Inc. Is a Brokerage firm out of Ohio that offers both full service brokerage as well as self service discount brokerage services.  They charge a flat fee of $19.95 to buy and sell any number of Equities which includes shares and stocks at any price.  The fee to buy, sell, and exchange No Load Mutual Funds is $25.

A No Load Mutual Fund is a mutual fund that does not automatically charge a fee (usually a percentage of your transaction) to buy or sell.  The fees for Broker Assisted Transactions are not listed.  This may be because Full Service Brokerage fees vary depending on the size of our investment portfolio as well as the experience of the broker.

TD Ameritrade is an affiliate of TD Bank which offers discount brokerage services in Canada, US, and Europe including Great Britain and Ireland. The spokes person for TD Ameritrade is the District Attorney Jack McCoy from Law and Order.  TD Ameritrade advertises “Low Commissions. High Value.”

The pricing of TD Ameritrade is very competitive at $9.99 per internet trade for an unlimited number of shares.  They also offer Interactive Voice Responses via Telephone for $34.99, as well as Broker Assisted transactions for $44.99.  TD Ameritrade is currently offering 30 days of free trading.

E*Trade may be one of the most publicized self service discount brokerage firms in the US.  I found the website to be the most user friendly of these 3 examples.  Finance is serious business but it doesn’t have to be boring. The E*Trade website is both professional and informative.  It includes training videos, along with daily stock and index quotes.  E*Trade offers an Education center for new investors. New clients can trade free for 60 days when we open an account.  E*Trade has been recognized for excellence in 2010 by Smart Money from the Wall Street Journal.

The standard E*Trade price for Stock and Options Trades is $9.99 per trade.  However, for trades of 150 stocks and more the price drops to $7.99.  There are also other fixed fees such as $2.99 for Futures Contracts and an additional 0.75 for Options Contracts.  E*Trade also offers Broker Assisted Trades for an additional $45 per transaction.

Self Serve discount brokerage firms are worth the fees if we are buying stocks because the per trade and annual fees are lower than fees with a Full Service Broker. However, if we are buying Mutual Funds, it is cheaper to buy them directly from the Fund Company and/or financial institution.  It is important to inquire on all fees and charges associated with investing before making any purchases.