This article is from the How to Start an Investment Program tutorial, author unknown.
If you want to begin investing your money in the stock market, whether through mutual funds or by purchasing individual stocks, you will need to open a brokerage account. These days there are more places than ever to open an account, and from what I read in the financial newspapers, there are soon to be more on the way.
To begin with, you have the traditional large, full service brokerage houses such as Merrill Lynch (http://www.ml.com/), Smith Barney (http://www.smithbarney.com/), and UBS AG (http://www.ubs.com/), etc. Firms such as these have a major presence in the U.S. financial capital, New York, and also have branch offices in all major metropolitan areas.
There are also regional brokerage firms that, although they are not national in scope, offer primarily the same full range of services as the big boys.
At the next level are the discount brokerage firms such as Charles Schwab, Fidelity, and Quick & Reilly. At these types of firms, the commissions you will pay to buy and sell stocks will be lower than at the full service firms, but you may not get quite the same degree of personalized service.
A third level for executing your stock and mutual fund trades are the new online brokerages. Companies such as Ameritrade, E*Trade, and Brown & Co. allow you to do all of your trading online without ever speaking to a live broker. As expected, this type of brokerage is for the do it yourselfer who can do his or her own investment research and stock selecting.
Update: In order to stay competetive, most brokerage firms are now, or soon will be, offering computerized online investing.