Gone are the days when choosing a discount stock broker meant simply shopping for the lowest commissions. Online stock brokers have a host of options for beginner investors and with the recent consolidation in the industry, and the intensifying downward pressure on commissions, discount brokers are scrambling to differentiate themselves from one another in ways beyond price.

That’s generally good news for investors because you can get better research tools, better service and better prices from your discount broker than ever before. But you have to be careful.

For one thing, it isn’t easy to shop around for the lowest commissions, as many brokers charge different commissions for everything from equity trades to mutual fund trades, broker-assisted trades, trades above a certain number of shares, trades of stocks below a certain price and more.

What’s more, many discounters offer price cuts to investors with large accounts, frequent traders or investors who have relationships with the company beyond just brokerage services.

And then there are the bells and whistles. Want in-depth research tools? An active community with which to trade investing ideas? Trading via handheld wireless devices? All of these services and more can be yours — if you choose the right discount broker.

The trick is comparing the online brokers on the criteria that matter to you.

Start by asking these questions…

Question #1: How much money do you have to invest?

Many brokers will cut their commissions for larger accounts (larger may mean anywhere from $100,000 to $1 million in assets). And some brokers such as Bank of America and Wells Fargo, even offer investors free commissions (up to a limit) if they keep $25,000 in brokerage or deposit accounts with the bank.

Brokers also may offer perks for larger accounts. TD Ameritrade, for example, offers clients with $100,000 or more in assets enhanced research tools and priority customer service.

On the flip side, if you have only a small amount to invest, a few brokers, such as Firstrade, TradeKing and Sharebuilder, have no minimum initial investment requirements. And Scottrade requires just $500 to open an account.

Question #2: How frequently do you plan to make trades?

The more active you are the less you should pay per trade.

A broker like Zecco, which offers 10 equity trades per month for free, might be right for you. After that, you’ll pay just $4.50 a trade for stocks, which is still darn cheap.

Just be sure you’re looking at the commission schedule for the types of trades you plan to make. Zecco charges more for option trades ($4.50 + $0.50 per contract) and broker-assisted trades.

Question #3: What do you plan to trade?

The default stock order is a market order, meaning the stockbroker will buy your shares at the prevailing market price.

A limit order, on the other hand, means the broker will buy shares for you only at a price you select, or lower. Many brokers charge more for limit orders.

Most discount brokers also charge more for options contracts, mutual funds and touch-tone telephone trades.

In addition, a number of brokers, including giants Fidelity and Schwab, charge more for trades over 1,000 shares (some charge more for trades over 500 shares or 2,000 shares).

So if you plan to make any of these types of trades, be sure you do some sample calculations before selecting your discount broker.

Question #4: Do you want a one-stop shop?

Many of the low-price leaders only offer limited investment vehicles — stocks, options and ETFs — but a lot of the larger firms have a wide range of no-commission, no-transaction-fee mutual funds, plus bonds, annuities and banking services, ranging from check-writing accounts to debit cards.

Indeed, it is possible today to have all of the services you previously divided between a bank and a full-service broker under one roof, with analyst recommendations and advice included.

Question #5: Do you want to use your discount broker for advice?

Discount brokers used to be mere order-takers. Not so anymore. Today’s discounters offer a wealth of tools to help you perform your own stock research, generate investing ideas and develop a financial plan.

These tools range from simple stock screens, quotes and access to Standard & Poor’s research reports to proprietary analysis tools and independent advice from Wall Street experts.

Fidelity, for example, has an analyst recommendation tool that shows you not only what expert analysts recommend, but also how those analysts have performed over time.

E*trade has analyst research from seven independent sources. And TD Ameritrade has an in-house investment strategist that provides weekly commentary, and an online, real-time forum with access to Wall Street experts.

Other firms, like TradeKing and Zecco, offer robust trading communities to help you select securities and advise you on when to make trades.

Question #6: How comfortable are you with the discount broker’s site?

The reason most discount brokers can cut their commission to $10 or less is because they’re relying on you to trade online. Therefore, it’s important that you’re comfortable with the web site.

If you find the site difficult to navigate, it doesn’t matter how low the commissions are, you won’t be satisfied.

Likewise, if the site goes down frequently or gets jammed by frequent trading activity, or if your own Internet service provider is unreliable, you may want to look for a discount broker with multiple trading platforms available, whether that means telephone, broker-assisted or handheld wireless device trading.

No Need for Full-Service Stock Brokers in Today’s World

Although discount brokers will never offer you the one-on-one relationship you get with a full-service broker, today’s discounters offer enough services to come pretty darned close — and at a cheaper price, too. (See also: Do You Need a Full-Service Broker?)

Plus, you don’t have to worry about a discount broker pushing the latest company-recommended stock on you, as you would with a full-service broker.

Just be sure to shop around to find the discount broker that meets your needs best.

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