Different Types of Firms

Last updated: April 13, 2016

Five Different Types of Firms:

1. Full-Service Brokerage Firm

A full-service brokerage firm helps you do your homework. 

  • They research and recommend investments tailored to your financial profile. 
  • They buy and sell securities on your behalf. 
  • The firm's brokers are usually paid a sales commission when you buy or sell investments.

2. Discount Brokerage Firm

Discount brokerage firms provide limited services. 

  • This means significant discounts from the commission rates charged by full-service firms. 
  • In most cases, these firms will not assign a specific broker to your account. 
  • Generally, discount brokerages serve solely as order-takers and do not make recommendations. Some firms may provide this service for an extra fee.

3. Online Brokerage Firms

Some traditional full-service brokerage firms have websites for online trading. Other online firms act much the same as discount firms, serving primarily as order-takers. 

  • Shop online for the firm that best meets your needs and your level of experience.

4. Specialty Brokerage Firm

Some brokerage firms specialize in certain types of investments. 

  • For example: mutual funds or bonds
  • They gear their recommendations toward particular products that suit you.

5. Investment Adviser

An investment adviser (1) provides personalized advice or recommendations for you to make investments, or (2) you can authorize them to make and manage investments for you. 

  • This includes strategies for investing, minimizing tax effects, and providing for your future financial security. 
  • An investment adviser provides these services for compensation. 
  • Unlike brokers, investment advisers are required by law to act as a fiduciary on behalf of their client. This puts the client’s interests ahead of their own.
  • Learn more about investment advisers here.

*The information on this page is credited to IPT and Kiplinger. Their original materials are made available on the Kansas Securities Commissioner's website.

This article is published on KansasMoney.gov. Find more information by contacting these state agencies: