"The broking industry has been massively shaken up by the forces of competition, especially the cheap online broking services. Gone are the days when brokers routinely charged around 2.5% to buy and then another 2.5% to sell. (Makes you wonder how traders ever made a living back then) Nowadays many people use 'no advice' brokers and pay considerably less than 1% per transaction. Online trading via the Internet has become very popular and can be conducted through companies ... If you are new to the market though, or can find a good one, there can still be value in paying the higher rates for a broker who conducts research and offers client advice. One advantage of a good advisory broker is that the principals of many companies need good relations with brokers and therefore often tell them stuff that may not be generally known. Brokers, being in the industry, hear a lot of rumours, both good and bad, that can be very useful.

The downside is that unfortunately some brokers use clients for their own ends. If for instance a Shark needed to get out of a stock urgently, an unscrupulous broker might recommend that stock to some of their Fish or Plankton, to help out the more valuable customer. Other times a broker might have a vested interest in the success of a float that their company is underwriting and may sell shares in that float to clients, whether they believe in the ultimate success of the company or not.

Brokers also have interests that can be at odds with the client. I have already mentioned two of these, keeping clients invested in shares as opposed to other types of investment, despite the market being over-bought, and profiting from excessive turnover of stock (churning) whilst the client is obviously better served by minimising turnover and consequently brokerage costs.

A good broker will know when to question your order and can occasionally stop you from making a mistake. They will notice when your order is running against the tide and will know when to exercise their own discretion to save you money. A bad broker will be proactive at the wrong times, will not get the best price available, will not always try and contact you if something relevant happens that may affect your order and will generally cost you money that a good broker would have saved."  »»» Click Here For More