A broker, also known as a brokerage, is a company that connects buyers and sellers of investment vehicles like stocks and bonds. A brokerage account is often where an investor keeps assets.
What Type of Brokerage Account Is Right for You?
Some people prefer to have a human handle their finances. Good financial advisors build and monitor investment portfolios and offer advice in many aspects of their clients' financial lives. They also provide auxiliary services such as insurance, estate planning, accounting services, and lines of credit.
For the most part, these platforms leave it up to you to figure out which investments are the best, but they typically offer a suite of research and analysis tools. Many provide expert recommendations and insights to help you make informed decisions. You are then on your own to execute the trades to build your portfolio through their website or mobile app.
Robo-advisors automate investing and use technology and algorithms to manage your portfolio. Robo-advisors are likely to put your money to work using low-cost, indexed ETFs. In fact, the convergence of ultra-low-fee ETFs with low-cost technology solutions available on mobile platforms makes robo-advising possible.
Robo-advisors are certainly not for everyone, as they may not provide access to more complex products and strategies embraced by some investors.
How to Choose an Online Stock Broker