Here's a piece from the Motley Fool that describes the differences between full-service and discount brokers. First they detail what full-service brokers offer:
Full-service brokerages traditionally offer everything from stocks and bonds to annuities and insurance. As their brokers profit largely from commissions, they're sometimes motivated to encourage a lot of buying and selling that may not be in your best interest. Other times, they might just toss your money into a mutual fund and forget about it. There are many good brokers at full-service brokerages, though, who keep your best interests in mind and do a bang-up job for their clients. If you're taking the full-service route, you simply need to determine just how good a job your broker is doing for you, and if the cost is worth it. If you have a broker you like who's doing well for you, sticking with her might be a good idea.
As you might imagine, I'm not a big fan of full-service brokers -- too much cost for too little reward in my opinion. And since I invest mostly in index funds, why would I need one?
Here's their description of discount brokers:
Discount brokerages have traditionally offered a narrower range of services, but they've been adding significantly to this range in recent years. Indeed, the distinction between full-service and discount brokers is much murkier than it was just five years ago. Today, many discounters offer mutual funds, banking services (such as checking accounts), IRAs, mortgages, and more. Some even offer fee-based portfolio consultation and investment advisor services for wealthier clients. Others offer research reports and stock analysis. Discount brokerages compensate their brokers mainly with salaries, not commissions, making their money through high-volume trading.
This is more to my liking. When I want to make a trade, I simply want to buy the stock I want and to do so quickly at a great price. I don't need any other kind of assistance. This is why I prefer discount brokers and have accounts set up with a couple of them.