Online Investing Vs. Personal Broker: Who Wins?
Articles Investing Personal Finance

Online Investing Vs. Personal Broker: Who Wins?

Articles Investing Personal Finance

When it comes to investing in the stock market, you have two main choices open to you.

The “traditional” way of putting money into stocks was to employ a personal broker – someone who buys and sells stocks for you, either under your direct guidance or with their own initiative.

Until relatively recently, this was the only practical way to invest in the stock market. However, nowadays there are many tools that are available to the average investor, and through which you can buy and sell stocks on your own.

Wealthface is one of those tools that allow you to research, buy, and sell stock directly from the app, and keep total control over your investments.

There are advantages and disadvantages to both approaches. In this article, we’ll take a look at them, and guide you through this important investment decision.

Control Over The Investment

Perhaps the biggest difference between hiring a personal broker vs. investing online is the level of control you have over the stocks, shares, and other instruments you invest in.

By definition, employing a personal broker means ceding some of your control to them. There are many ways of working with a personal broker.

Some investors have a closer relationship with their broker than others, and such people give their brokers more explicit instructions.

On the other hand, some prefer to give their broker the most general instructions (“generate a good return!”), and then let them make all the decisions from there.

But in all cases, it is the broker who is making the traces, and he has the ultimate say over where money is invested.

This can be contrasted with the online investing approach, where you have total control over where your money is invested.

You can buy and sell individual stocks, and design your own portfolio right down to the smallest detail.

For investors who want to stay in control, a platform like Wealthface is great, because it allows you to make investment decisions in real time, and without going through a “middleman”.

There is one exception to this rule. Sometimes, personal brokers will have access to stocks and shares that are not available on the general market since third parties often inform dealers that stocks are available, and then shares are offered to you through your broker.

While you still have a degree of control, this is a much more guided approach, which is great if you don’t know much about the stock market.

Research Of The Investments

The disadvantage of having total control, however, is that the responsibility to research your investments falls completely to you.

Other online platforms, unlike Wealthface, offer you thousands of options as to how to invest your money, and this can be overwhelming.

Quality platforms like Wealthface will guide you through your investment decisions and will limit the level of individual research you must do – but, regardless, you will still have that responsibility.

This is not the case if you hire a personal broker. Personal brokers do all the research for you and can save you a significant amount of time.

Additionally, these financial professionals can prevent you from investing in something that isn’t beneficial for you.

Thus, this can be a better way to spend your money if you’re inexperienced with the stock market. Personal brokers also bring a certain amount of knowledge with them that could help you avoid scams.

The responsibility to research your investments is the only major drawback of using online platforms, but it can be an important one.

If you make a decision to invest in something that doesn’t make a profit, that decision is on you. That’s why you should always do as much research as you can find time for, and never invest more than you can afford to lose.


The third and final important difference between these approaches boils down to the cost of them.

Trading in stocks is never free, and so you’ll always have to pay something to be part of the market. However, there is an expensive way and an inexpensive way of doing that.

Personal brokers are expensive. On top of charging fees per transaction, many take a percentage based on your overall profit.

While the costs may seem excessive, you’re paying for the knowledge and time the broker has gained throughout the years.

This tradeoff can be a sound investment if you aren’t knowledgeable in stock market trading. Think of it as hiring a professional advisor to guide you through the confusing world of investment.

On the other hand, we now have the option of choosing online platforms. These platforms are generally far less expensive than hiring a broker.

Naturally, you will have to pay a small percentage on the amount of trading you do through an online platform, but this will be very small compared to the fees charged by a broker.

This means that for most beginner investors, going through an online platform is a far more cost-effective option.

Unless you are investing a lot of money, the fees charged by personal brokers can sometimes wipe out any gains you make, meaning that you are unlikely to see a return on small investments made through a broker.

The Bottom Line

Each of these trading options has its own benefits and drawbacks. Trading stocks online is a way to make extra money, especially if you already have a little bit of experience in trading.

However, if you aren’t sure what you’re doing, it may be best to either make sure you have time to research your investments thoroughly, or hire a stockbroker.

While the fees may seem like a lot, stock brokers bank on being successful since commission from stocks is such a large part of their payment strategy.

If you’re looking to gain access to third-party assets that may not be available to you, a stockbroker is also an excellent choice.

It all depends on your investing style, of course. If you want to be in control, and pay less in fees, you should use a platform like Wealthface. If you want to pay extra for more advice, then hiring a broker can be a good option.

Wealthface smart financial tools will help you shape your financial future.
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Wealthface - Your online investment solution
Wealthface is a one-stop online investment company that services all kinds of investors. It provides affordable high-quality investment products and services, tailored to each type of investor, and delivered at a low cost in a fully transparent manner. The company plays the role of a Fiduciary investment advisor, which means it always puts the client’s interest first.
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