Online Discount Brokerages

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discount brokerage

Online brokerages are companies that allow you to set up an investment account with them and buy and sell investments.  The purpose of setting up one of these accounts is for someone who is a “do-it-yourself” investor and can buy investments without the help of an advisor.  An investor can have an advisor and still do some investing in a discount brokerage account.   Don’t be afraid to tell the advisor about your investments so they can include them in your asset allocation.  If they make  a big stink about it then find a new advisor!

What kind of investor has an online brokerage account?

There are many different types of investors.   Some investors do everything on their own without any help from anyone.  Other investors refuse to do anything for themselves and want a financial advisor to do everything for them. These are examples of investors extremes – there are a lot of successful investors who are somewhere in between.  Many people will use a financial advisor for some of their accounts but not all – others might use a fee-only advisor for general advice and suggestions and then will carry out the ideas on their own at an online brokerage.  Regardless of what type of investor you might be – it’s important to at least know about the option of doing it yourself.

What do you do with an online brokerage account?

The basic steps with an online account are:

  • Set up the account at a discount brokerage such as  or Zecco.
  • Fund the account with some money or with investments from another brokerage.
  • Start making purchases in the new account.  This will be accomplished online.

When it comes to financial planning – buying the actual investments is pretty far down the priority list – there are many other steps to accomplish first such as figuring out your financial goals, investment time horizon and asset allocation.

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