Whether you want to actively buy and sell stocks, open a Roth IRA, or just explore different investing strategies, you’ve probably come across some recommendations and reviews of brokerages. But what is a brokerage? How does a broker work for you and your money, and what should you know before choosing one?

While choosing a broker can feel like a major decision, consider it akin to choosing a college. Is there one “right” college? No. The right college for any student depends on a host of factors, including their educational goals. The same goes for brokerages. The right brokerage for you depends on your financial goals, the types of investments you want to make and even the usability of the brokerage’s mobile app.

Here is what you need to know about different brokerage firms as well as some key questions to consider before deciding which broker is right for you.

What does a broker do?

A brokerage account is simply a means for investing in the stock market. A broker works on behalf of clients to buy and sell stocks (or other types of securities) and advises clients on investment strategies. A broker typically will charge a type of fee known as a commission to the investor to execute trade orders.

There are differences between a broker and a financial planner or financial advisor. An independent financial advisor or investment advisor is often a fiduciary, which means they must put a client’s best interest first. And while there is a proposed SEC regulation that would require brokers to act in the best interest of a client, for right now, the advice of brokers must be just “suitable.” So, in reality, that may not be optimal for your needs. In other words, while a broker may know the market, it may behoove you to do your own due diligence and research as well.

Types of brokerage firms

Historically, an investor needed to work with a human stockbroker to make trades. But online brokerages have made it easy for investors to trade electronically. Still, there may be times when it may make sense to work with an individual stockbroker, especially if you want to make a specific trade at a specific price. That’s why some online brokerages give you the option of working with a human instead of making only self-directed (or even automated) electronic trades.

Here is a breakdown of the types of brokerages you may choose to do business with.

Full-service brokers

These brokerages, which include Morgan Stanley and Merrill Lynch, have brokers who execute trades for their clients. These brokers will forge a relationship with you, keeping your investment goals in mind as they advise you on financial strategies. A full-service broker is the costliest option, but the relationship building and advice may be worth it to some investors who have a dynamic portfolio they want actively invested but don’t have the time to trade themselves.

Online brokers

As electronic trades rose in popularity, many traditional brokerages began to offer their advice to customers through online platforms. These trades, called assisted trades, may have higher fees than DIY trades do. Some discount brokerage firms also offer assisted trading, and this can be a way to bridge the gap between a discount broker and a full-service brokerage.

Discount brokers

These brokers typically are more affordable options for buying and selling securities since investors make the trades themselves. Fees may include commission and account maintenance fees, but, overall, they usually are far less than those of full-service brokers. (Full-service brokers may charge $40 or more in commission per trade, while a discount broker like Charles Schwab may charge less than $5.) Discount brokers make sense for investors who stay informed on the markets and are comfortable investing on their own.

Robo-advisors

Robo-advisors like Betterment, Blooom and Wealthsimple make investment decisions based on algorithms. The portfolios may be rebalanced based on how the market is performing, and they can be great for investors who have an investment goal but don’t necessarily want to be hands-on in how their investments are handled.

How to choose a broker

The best broker for you is the one that fits your needs — and doesn’t provide services you’ll rarely, if ever, use. For example, if you’re primarily looking for a brokerage that will allow you to make DIY trades in real time, a brokerage that offers a robust research section or multiple investment account options might not be best for you. Knowing how you’re likely to use the brokerage can help you avoid fees for services you won’t need.

Here are some things to consider when choosing a broker.

Fees and account minimums

When you compare brokerages, you’ll likely see some common investment fees, including:

• Brokerage fee: This is the fee charged to maintain your account. It may provide access to investment platforms, educational resources and client programs, such as the ability to chat with a financial advisor.
• Trade commission: A trade commission, which also may be called a stock trading fee, is the fee charged for buying or selling stocks, options, exchange-traded funds (ETFs) and other securities. It may be a flat fee, or it could be a fee charged per share being bought or sold.
• Mutual fund transaction fee: This is the fee charged for buying and selling mutual funds.
• Management fee: Also called an advisory fee, this fee is based on a percentage of your assets under management.

Fees may seem small — think 0.30% — but they add up over time and may be a factor in choosing a broker. If you were to invest $10,000 in an account today and let it sit untouched for 20 years with a 7% return, the account would grow to about $38,697 — but nearly $2,000 would be eaten up by fees. That money could have been used or invested elsewhere, so looking at the big picture can be a helpful way to determine how much you’re really paying and how much your money can really grow. You can use a calculator tool to compare fees when thinking into the future.

Account offerings and range of asset types

Some investors use one brokerage as an umbrella for all their investments, including their retirement accounts, investment accounts for everyday trading and 529 plans. Other investors may choose separate brokerages — perhaps a fee-free brokerage for everyday trading and a more comprehensive brokerage for retirement savings. Knowing how you plan to use the brokerage may help you decide which one (or more than one) is right for you.

Access to investor support and education

Some brokerages give you the option of working with a human broker for certain trades or offer robust customer service such as chat and email support support. Other brokers offer a wide range of educational materials for their customers. It’s a good idea to consider how you’ll be using the broker’s products. Do you plan to regularly invest on a mobile platform? If so, it makes sense to compare how easy it is to use the mobile apps across brokerages.

Access to cash management and payment services

Do you want your investment account to also function as a way to manage liquid money? Some accounts allow you to write checks or access liquid funds with a debit card. How you use your account may affect the type of brokerage you plan to use.

Finding the right fit

While some brokerages attempt to reach all investors, others are niche. For example, Ellevest aims to reach female investors. Motif is designed for investors interested in motif, or impact, portfolios. Blooom is primarily for 401(k) management. If you have a specific interest or want an account to help you reach particular goals, then it may make sense to choose a boutique brokerage that can help you reach those goals.

Again, there isn’t one right option, but there may be a right option for you. Comparing different brokerages can help you make the best choice. And remember that it isn’t a contract — if you feel your financial needs are not being met, you can take your money elsewhere.

Bottom line

When you choose a brokerage to work with, remember that you’re a client and that the brokerage wants to keep you feeling satisfied with the company and its services. If you have questions or concerns or feel like the brokerage isn’t living up to your expectations, contacting the customer support team can help you make sure that the brokerage is working for you.

The brokerage also may also offer a range of services to clients, including education, research, webinars and portfolio management tools. Taking advantage of these services can be a smart way to further your investment knowledge and sharpen your investment skills.

Even if you choose a robo-advisor, that doesn’t mean you’re fully off the hook in terms of managing your account. Keeping track of your investments and regularly checking up on your portfolio is a smart strategy even if you’re not choosing investments yourself.

Finally, remember that it’s your money and that you can always go elsewhere if the brokerage you chose isn’t working out as you had hoped.