Low Cost Stock Trades Are Thanks To Internet Stock Broker CompaniesThe investment world has been turned on it's head by the internet. The emergence of internet stock broker companies has transformed the services, charges and profits of the stockbroking industry.
At the turn of the century, investment information firms used to enable investors to track their portfolios online, for free. The availability of this technology meant that many of the high priced tracking and monitoring software systems started to become obsolete. Why pay twenty or thirty dollars each month to track your holdings when a website will let you do it for free? Even worse, the free website might use technology that does a better job!
The private investor now can have real time access to the market and watch trades, including their own be actioned. Not only do they have this access, but costs are so low that it is available to the private investor for almost every major world stock exchange for one monthly payment. There is even price competition in this area now. The advances of both computer memory and internet capabilities means that this information can be distributed at very low cost. It also means that huge quantities of information can be stored and therefore available to all. Simply, the emergence of the internet stock broker has turned what was once a profitable and elite trade into a low cost commodity. This trend will almost certainly continue. This process is also making it far easier for an investor to buy and sell in different world markets and assets. This by very definition is lowering the costs of international trades and forcing local stockbrokers to compete with internet stock broker firms that span the globe virtually. Almost anything that was once considered to be an 'exotic' investment is now purchasable at very low cost online.
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Once upon a time, being a stockbroker was one of the most highly paid professions available. The emergence of the internet stock broker means that this will never be the same again. Who knows, in twenty or thirty years time, stockbrokers may not even exist! An 'Execution Only' Service A feature of online share dealing is that a customer selects the investment to be made himself or herself. No advice is offered or given by the company. This means that the individual is fully responsible for the outcome of the trade, good or bad. The massive rise in the numbers of investors and selecting 'no advice' suggests that this is a popular move.
Under such circumstances, the client takes the risk for any problems - deliberate or not - with a large portion of their net worth. Many are now simply unwilling to provide such a level of trust. With such a backdrop, carrying out a stock purchase online with no requirement to deal with - or abdicate responsibility to - a stockbroker is the preference of many millions of investors. The three levels of service are:
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