READY FOR DISCOUNT BROKERAGE?
READ THIS BEFORE YOU SIGN
If you’re planning to open a discount brokerage account, here is information that may
help you avoid unpleasant surprises.
Discount brokers (or dealers) are firms that act as intermediaries in securities
trading. In other words, they are firms through which you can buy or sell stocks,
bonds, mutual fund units, or other securities—but they will not provide any advice on
the purchase or sale of these securities. Discount brokers must be registered with
the Autorité des marchés financiers (AMF).
Make sure your discount broker is registered with the Autorité des marchés
Discount brokers carry out trade orders for lower fees; this is their main advantage.
However, fees may vary from one discount brokerage to another, so be sure to
confirm all the fees that will apply to your account, and compare them to the cost of
doing business with a full service brokerage. Unlike discount brokerages, full service
brokerages provide advice on the purchase or sale of securities.
Since you won’t be receiving any advice about buying or selling securities, you’ll
need to have a basic grasp of financial investing. For example, you should know how
to read financial statements of companies whose shares you intend to buy. As well,
you will need to establish your investment objectives and risk tolerance in order to be
able to determine suitable products.
Do you have the basic knowledge needed to make informed investment decisions?
If you use a discount broker, you’ll need to spend time on researching investments
that you own or want to purchase. You will constantly have to monitor information
that might affect the value of your holdings. Whether your returns are positive or
negative, this is quite important because you’re the one who will be making the final
Do you have enough time to research the investments you own or the securities
you want to purchase?
Information from discount brokers