Should You Invest Online or Through a Broker?

Are you going to invest some money in the stock market?  Congratulations, you are one of the estimated 48% of Americans who have decided to entrust their funds to the ups and downs of Wall Street.  If you’re new to investing, getting starting can seem overwhelming, but once you get yourself comfortable with a strategy that works best for you, handling your stocks won’t be much of an issue.

Perhaps one of the biggest questions people have about starting a stock account is if they can do it themselves or if they have to go through a firm.  While both are perfectly acceptable, what’s right for you will depend on your investment goals, amount you’re investing, and what you’re comfortable doing.

What you should know about investing through a broker

When you work with a financial advisor, stock broker, or investing firm, there are several benefits.  First of all, you’ll be able to work with people who know how the system works, what stocks perform well over time, and how to invest your money to reach your goals.  You won’t be left to do mass amounts of research on your own or learn the basics of investing 101 through trial and error.

Who Should Work With a Broker?

If you have a lot of money to invest, but aren’t sure how to go about creating a diversified portfolio, it’s a good idea to work with a financial advisor.  They can help you focus on your investing goals (long term vs. short term), identify some good stocks to buy, and manage your funds for you.


If you’re new to investing and don’t feel comfortable doing it yourself, find a broker or firm in your area so you can go in and meet them face to face.  This will play to your advantage down the road when you want to move funds, cash out assets, or just make some changes in your investments.

The bottom line is this: brokers have the experience and expertise you lack and are better qualified to lead you in a direction that will benefit you.

Drawbacks to working with a broker:

My first stock account was set up on my behalf by the broker that works with my grandfather.  Anytime I wanted to access cash, I had to guiltily call the office and tell them I needed X amount, which meant they had to scramble a bit to figure out what stocks to sell.  I would have much rather had it set up so that I could access my money without a middleman.

On top of that slight inconvenience, any time you want to sell or buy stocks, there is a commission charge.  My particular broker charged approximately $35 per transaction per different kind of stock.  So if I was selling some of my ABC stocks, as well as my 123 stocks,  I was already paying $70.

DIY Online Investing

At some point, I decided that my son needed to have his own stock account.  I didn’t have much to start with, but I liked the idea of investing in a few particular stocks for the long-term more than letting his money (mostly from his birth and subsequent birthdays) sit in a savings account accumulating next to nothing in interest.

Instead of going through the whole process with a broker, I decided to try out online investing through a company I trusted, in this case Capital One.  I’ve worked with Capital One loads of times over the past decade and really liked their services.

I created his stock account and had it funded in about 2 business days.  Then I could buy stocks myself, simply by typing in the company’s stock market symbol.  It was easy for me to log in, see what the stocks were doing, add money to the account, and make adjustments as needed.  Plus, the commissions were considerably lower—only about $6.95 per transaction.

This worked for me because I wasn’t investing a whole lot of money and wanted an easy process that allowed me to make changes on my own, without feeling like “experts” were giving my choices a side-eye.  I also had done some easy research on what kinds of stocks I wanted, as well as the companies I liked and just wanted to buy a piece of.

Whether or not you decide to invest with a broker or with an online account, the stock market is going to continue growing, falling, making money, and losing money.  If you think you’re ready to open an account, check out your options carefully, weigh the decision, and then take the plunge.