Stockbrokers act as your agent to buy shares on the share market.
Investors have two options of buying shares in a company.
They can purchase the initial public offering of shares or purchase shares after the public float.
A stockbroker is required for both share transactions to occur.
The level of advice that stockbroking firms offers the investor varies.
Advisory or Full Service Broking Service Can provide investors with advice on the buying and selling of shares based on research and recommendations.
They may also offer customers advice on other investments tailored to thee customer's investment plans.
They normally charge higher brokerage fees on each transaction.
Some full service brokers also allow customers to trade online with a reduction in the brokerage fee.
Non advisory/ Discount Broker These services perform transactions over the phone or on the internet.
They do not offer recommendations or advice on the decisions of the investor.
They essentially provide an "execution only" service and in doing so are able to offer lower brokerage fees.
It is important for investors to know what services they want from their broker as the advice that a full service broker can offer often outweighs the premium brokerage charge.
This is particularly important if you are just starting out in the stock market.
Investor Protection To maintain market integrity the stock exchange is responsible for regulating and supervising transactions.
A surveillance department electronically oversees the market for irregularities in the activities of share market participants.
A valuable way to better understand how you can make money in the Australian share market is by joining an investors forum.