Describe how online brokerage accounts differ from managed brokerage accounts.

Online brokerage accounts and managed brokerage accounts differ primarily in terms of control, cost, and the level of service provided. Here's a breakdown of these differences:

Control

• Online Brokerage Accounts: Investors have full control over their investment decisions. They can buy and sell securities directly through an online platform without the need for a broker's intervention.
• Managed Brokerage Accounts: A professional financial advisor or broker manages the account on behalf of the investor. The advisor makes investment decisions based on the investor's goals and risk tolerance.

Cost

• Online Brokerage Accounts: Typically have lower fees because they do not involve personalized advice or management services. Investors pay for trades and possibly a small account maintenance fee.
• Managed Brokerage Accounts: Usually have higher fees due to the personalized service and professional management. Fees may include a percentage of assets under management, transaction fees, and other advisory fees.

Level of Service

• Online Brokerage Accounts: Offer limited services, primarily focused on executing trades and providing research tools. Investors are responsible for their own investment strategies and decisions.
• Managed Brokerage Accounts: Provide comprehensive services, including investment advice, portfolio management, and financial planning. The broker or advisor actively manages the portfolio and provides ongoing support.

Final Answer

Online brokerage accounts offer self-directed investing with lower fees and more control, while managed brokerage accounts provide professional management and personalized advice at a higher cost.