A full-service or traditional broker provides investors with advice about stock purchases, portfolio allocations, and other investment decisions. Full-service brokerage firms, such as Merrill Lynch, A.G. Edwards, and Morgan Stanley, pair you with an expert who helps you select the right investments and tracks the performance of your portfolio. Most full-service firms allow you to buy and sell stocks, bonds, mutual funds, and other investments via email or by phone. Others also offer retirement planning and tax services. This personalized service, however, generally means higher fees and commissions. Most firms are not public about how much commission they charge per investment, but some have been known to charge as much as 5 percent or more of the value of a trade.

A discount broker, on the other hand, offers no personalized investment advice and simply performs investment transactions. However, some now provide investors with valuable research options. As the name implies, discount brokers typically charge lower commissions for transactions, but fees per transaction still can cost anywhere from $8 to $30 per trade. Most discount brokers allow you to buy and sell investments online or by phone. Examples of discount brokers include E*Trade, ShareBuilder, Scottrade, and TD AMERITRADE. Fees and minimum amounts required to open accounts can vary widely among discount brokers, so it pays to shop around before opening an account. If you plan on going the traditional route, it's a good idea to consult the Securities and Exchange Commission at www.sec.gov to make sure your broker is registered or licensed, and that he or she has not had any problems with regulators or other investors.