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Definition - What does E-Brokerage mean?

E-brokerage allows users to buy and sell stocks electronically and obtain information with the help of a website. Almost all e-brokerage houses have simple sign-up and provide users the ability to make them their own financial manager. With the advent of widespread Internet connectivity and smart devices, e-brokerage has seen significant growth.

Techopedia explains E-Brokerage

Two big factors have helped in the growth of e-brokerage, namely Internet access and lower prices. The Internet has allowed users to have ready access to raw data. E-brokerage is capable of offering lower prices than traditional brokerage techniques, as the need for brokers or financial advisers are eliminated in the case of e-brokerage. To attract more customers and retain existing users, most e-brokerage firms provide a number of tools, technical indicators which give real-time information and help in research and decision making.

E-brokerage has many benefits for its users. Users can have more flexibility as well as control over their portfoliios and transactions. One can access their brokerage account at any time, even if trading hours are over. The biggest advantage of e-brokerage is that the commission cost is significantly lower than in case of services of a professional broker. Again, trades are processed quickly in e-brokerage and there are no delays, unlike traditional brokerage methods.

However, there are a few disadvantages associated with e-brokerage. Unlike traditional brokerage, the mentoring relationship between the account holder and professional broker is not there. All financial choices must be made by the user. In essence, the level of service is less than with traditional brokerages.

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