How much will I pay in fees?
The answer depends on the kind of service:
- Full-service brokerage firms provide advice, along with a wide range of services.
- Discount brokers provide access to research but no investment advice. Their fees are lower.
This chart shows the range of fees you might find for each service.
| Type of Service | Do they offer advice? | How are they paid? | Fees |
| Full-Service Brokerage | Yes | Commission, or salary plus commission | $75-$150 each time you buy or sell |
| Discount Brokerage | No | Salary | Varies, based on the size of your trade. Typical fees range from $30-45 each time you buy and sell, but some start as low as $10. |
Example: Let's say you invest $1,000 in a stock and make $80 when you sell. That's an 8% return on your investment. Then, you have to pay a $20 commission. This means you only get to keep $60. So your 8% return drops down to 6%.
Now let's say you invest $1,000 in a different stock and make only $50 (or 5%). You have to pay the same $20 fee to the stockbroker. That means you get to keep only $30, and your return drops from 5% to just 3%.
How can I reduce my fees? Three tips
Avoid quick turnovers:
Some people buy and then quickly sell stocks. This quick turnover means you are paying a lot in fees, which means you?ll get to keep less of what you make.If you plan to trade a lot, ask your broker for a lower rate:
Brokers can sometimes give you a better deal on fees if you buy and sell often.Pay only for the level of service you need:
If you're new to stock investing, don't forget the value of the advice you can get with a full-service broker. If you have experience investing in stocks, and you want to spend the time doing the research, think about the savings in fees you could get with a discount service.
Remember: There's always a cost to buying and selling stock
How much you pay in fees depends on the type of service the broker provides. Don't forget, you may also pay taxes on the money you make from your stock. Those taxes also reduce your return.
Content in this section is provided in partnership with the Investor Education Fund, a non-profit organization promoting financial literacy to Canadians. To find out more go to GetSmarterAboutMoney.ca.
