What to expect full service and discount brokers in India

[laxmi13]

I am trading with a company providing very good terms with no hidden costs

with maximum exposure abt 6-10 times in MCX

MCX/NCDEX @ 1999 PM (Unlimited )

Currency @ 999 PM (Unlimited )

Cash /FNO @ 1999 PM (Unlimited )

Account opening same day

Regards

I have seen many people do not understand difference between full service and discount brokers.
I have traded with both (ICICI, MOSL, ANGEL, INDIABULLS, RK Global) and (Zerodha).
Discount brokerage is still evolving concept in India.
If you use a brokerage, it's useful to understand the difference between full-service brokers and discount brokers. Think of it this way: When dining out, your choice of restaurants ranges from Uncle's kitchen to Oberoi's Amar Vilas.
Both provide very tasty food.
At Uncle's kitchen, you have to do self service or waiter will take orders, you have to wait for waiter to come over. Waiter will not suggest good food for evening etc. He will either tell you what's hot or cold and take order quickly.
Same guy will just deliver food and plates on table. He may give you pleasant smile or may not. He will expect you to eat fast, pay bill quickly and leave place so he can serve next customer. Uncle will charge Rs. 10-15 for cup of coffee and 5 for cut-in tea and 7 for full cup of tea.

At 5 star restaurant, you will be welcomed by some sweet sixteen young girl (selected by top officials). The captain will talk to you about evening (if you have foreigners, he may speak some welcome words in foreigner's native language - see we expect FDI here ). Captain will all suggestions about food, help you select it, will take orders on latest ipad. If you do not like one of dishes (which he suggested) he will not charge you for that dish as well.
Even if you order just one cup of coffee (he will not offer cup of tea as it's not there in menu card), he will not disturb you for next 3 hours. You will endup paying Rs. 350 for coffee and 150 for some taxes and 200 Rs. for tip, total= 700/-.

Uncle always say his kitchen is best in town. Does Uncle lie? No, as he is serving different market segment. People do not expect him to hire sweet sixteen and have Captain for service.
Full-service brokerages offer following

1. 
   IPO investments
   Stock buy and sell in cash market
   Bonds buy and sell
   Mutual funds buy and sell
   Annuities
   Insurance (health, life, term, investment)
   National Saving Certificates, Kisan certificates
   Margin funding for IPO
   Margin funding for stock trading
   Margin funding for FNO
   loan against gold (under different name)
   loan against stocks
   research reports on fundamentals
   research reports on technicals
   RM
   offline and online trading
   PMS for stocks
   PMS for mutual funds
   Wealth management
   Commodities
   Private equity
   Investment advisor
   Trading calls for multiple market segments and different time frame - intraday, short term, long term
   Demat
   ECN
   Call and trade
   Funds transfer from almost all banks

Full service brokerage firms offer multiple products to cater different market segments.

Let's talk about discount brokerage
Discount brokerage firms in India mainly offers

• 
  High speed trading terminal
  High speed order execution systems
  DMA
  Shared servers for co-location.

They expect do-it-yourself investor/ traders. They will not spend time on educating investors like full service one (see Uncle's waiter and Captain in 5 star). They do not offer own DMAT service.

Both provide equal level of security for investor's money in accounts as brokerage is highly regulated business. Both are at par in eyes of Sebi or stock exchanges like NSE, BSE. It's not like discount broker will run away with your money and full service one will not. Money is equally safe with both.
Discount broker charges much less fees as against full service.

If you buy Merc, your dealer giving 2 weeks training to your driver about how to drive Merc. Merc provides free pick up for your vehicle (any where in India even if your Merc is far remote area in India) to workshop. Merc service manager gives regular calls to customer on regular frequency asking about how car is doing. Merc customers are not expected to ask for why servicing charges are so high.

But, if you buy Nano or Maruti and say you know what Merc dealer do so much and this non sense Nano/ Maruti dealer is hopeless etc. does that makes sense?

As people do not expect owner of Uncle's kitchen to hire sweet sixteen and have Captain for service. People should not expect discount brokers to offer services of full service brokers at rate of discount broker's brokerage.
What you say?

 

[Prakashmalhotra]

The full-service category includes names Motilal, HDFC Sec, ICICI Direct, Kotak etc . They provide a variety of services, such as personal advice, planning, research reports and tips. They offer a wider selection of investment products. All this comes with a hefty price tag.

Discount brokerages charge a reduced commission and do not provide investment advice. Some names that spring to mind are Zerodha, and RKSV. They charge less, and offer a narrower range of services (though the differences are slowly decreasing between the two). The business model is built on having an effective system and quality service in order to put through the most volume.

Disclaimer: When it comes to choosing a brokerage, whether it's a traditional firm or a discount operation, there is no one perfect choice for every investor. It really depends on your personal needs and preferences, weighing the costs versus the benefits of each broker, and carefully comparing the level of services and features offered.