what is a discount broker 
a discount broker is a stockbroker who carries out buy and sell orders at reduced commission rates compared to a full service broker however a discount broker doesn t provide investment advice or perform analysis on a client s behalf like a full service broker only individuals with an annual income far above average could afford a broker and access to the stock market before the emergence of better communications technology the internet has brought an explosion of discount online brokers that allow individuals with smaller capital to trade for lower fees and with less capital in terms of the stock market most discount brokers operate through online platforms a discount broker is nearly synonymous with online brokerages as a result understanding discount brokersdiscount brokers carry out orders at less cost but they typically just execute orders for their clients these brokers don t offer personal consultations advice research tax planning and estate planning services for customers discount brokers can offer lower fees due to the lack of these services and because they don t spend money closing deals with high net worth individuals most discount brokers operate their businesses online where the overheads are low many discount brokers even went so far as to forego commissions altogether for certain types of securities beginning in 2019 1discount brokerages in the securities industry provide clients with their own accounts to enter orders for execution these investors usually don t interact with a live broker the communication is minimal and only engages in trade executions if and when they do the services provided by discount brokers are aimed at self directed traders and investors the electronic trading platforms are built in a way that s beneficial for active traders with charting and position monitoring services choosing between full service and discount brokerswhether an investor opts for a discount broker or a full service broker depends on their investing knowledge market experience financial goals and financial status commissions typically take a healthy chunk out of investment and trading returns so some individuals opt to instead go for products offered by discount brokers full service brokers are a better option for investors who need professional investment advice or require support to stay on top of their financial planning outside of investing 2 discount brokers are particularly useful to investors and traders who frequently and actively buy and sell securities investors who frequently trade benefit from the lower commissions that discount brokers charge investors who don t need advice have small portfolios or just want their trades executed are also usually better off using discount brokers discount brokers in other industriesdiscount brokers can also be found in real estate and other financial services fields discount brokers in the real estate industry help individuals buy and sell properties these discount brokers have access to the same home listings as full service real estate agents do and they help clients to access that information directly for a fee but they don t take the client through the purchase process as a traditional realtor would the national association of realtors nar settled a lawsuit in 2024 that was based on full service broker commissions the suit was brought on behalf of home sellers nar s settlement prohibits offers of broker compensation on the multiple listing service mls but this agreement would not affect discount brokers who aren t affiliated with nar it would not necessarily reduce or affect fees owed to a discount broker 3discount brokers may also sell insurance products although they don t provide professional financial advice either 