Starting your investment portfolio requires rendering the service of a broker.  However, not all brokers are the same.

There are two kinds of brokers:  the full-service broker and a discount broker.  Getting a "full-service" may sound like something you should have, but what does he do to your finances?  Does it cost you anything at all?

Here are the responsibilities between these two types of brokers.

Full-Service Brokers

Pros

They usually work for large brokerage houses such as Citigroup, Merrill Lynch, Morgan Stanley, etc.  Aside from executing trades on behalf of their clients, as what all brokers do, a full-service broker would also research various investments and give related advice.

Keeps you up-to-date with market trends, stock performance, and tax laws, while providing you with investment ideas and recommendations.

Recommended for those with significant portfolios and those who wouldn’t have the time to manage his finances.

Cons

Unless you have a slightest idea about the ins and outs of financial investing, you won’t know whether you are getting advice for your own benefit or for the broker to take your money to his pocket.

There is no guarantee a full-service broker is any better than you are at choosing investments.

You pay a hefty fee for these services, not advisable if you are starting to build up your portfolio.

Discount Brokers

Pros

Discount brokers usually work in E-Trade, Sharebuilder, Fidelity, TD Ameritrade, etc.  They often make more sense for the average investor because they are more affordable.

Recommended for investors who want to have a final say on every financial decisions.

Cons

Discount brokers deal in a particular type of investment such as stocks, bonds, mutual funds.

You need to review the schedule of fees to find out whether you are paying for commissions, account maintenance, and other fees.

Not all discount brokers offer the same services.

Once you have chosen your brokerage, download the application forms from its website and send in the completed forms with a check to fund your account.  You can begin trading as soon as the account is open.

Brokerages may require a minimum balance ranging between $500 to $2,000.  If you are opening an IRA (Individual Retirement Account), they may waive the minimum requirement.