An advisor was recently asked what the difference is between an online trading brokerage account and a self-directed account. Is there a difference between the two, or is the term “self-directed” just a new name for the same old, online trading account?
Online trading accounts rose to popularity in the mid- to late-1990s, when it was the wave of the future and certainly had its benefits. Online trading accounts increased the number of individuals owning securities at a faster rate than any other time since the stock market crash of 1929. That party lasted until 2000, when the technology industry’s bubble burst.