For a long time everyone has been telling you should invest in this or that, but the problem you had was not investing it was how to start. Well at least that was the problem I had before I got started. And, I am pretty sure some of you had the same or similar problem. My personal experience and an email that I received from a friend about learning how to invest led me to create this post. A post that offers 10 tips on how to choose that stock broker that is perfect for you.
Discount vs. Full-Service BrokerA discount broker is a broker that offers very little any advice and only gets commission from purchases. A full-service broker offers more investment assistance, but at some fee. So if you are a person that might need help with you investments, then a full-service may be the better choice. However, if you plan on making all the decision by yourself than a discount broker may be the better choice for you.
Broker AccessibilityCan this broker be reached easily, if not will there be someone cover for him or her. On a real busy trading day it is very significant to know if you broker can be reached.
Shop AroundMeet several brokers and talk to them. It is very important for you to build a rapport with them and to feel very comfortable. This person will be handling your money and investing it, so it won’t be a good idea if you feel intimated by him or her. If that is the case find someone else.
Get ReferralsDo some research and find out which brokers other people used and why they choose them. It’s always advisable to work with someone you heard good things about.
Broker that understands your needsHaving a broker that really understands your financial goals and needs can be very beneficial. They should be able to determine which investments best suit your needs and what type of investor you are; conservative, aggressive or somewhere in-between.
Background ResearchFind out the brokers background and strategy. Make sure they are properly licensed, and then find out about his or her experience, training and certifications. After that determine their technique towards investing and what criteria they use to make their decision.
A Broker With Your Interest In MindSome brokers may persuade you to investments that may give them higher commissions, but don’t give you any value. If the broker acts like he or she is offering a “sure thing” be very suspicious. Stocks are never a guarantee.
Defining Commission FeesFind out what are the commission fees and how are they determine. Make sure you obtain a fee schedule that details are their fees. Keep in mind that an annual fee, rather than a transaction-based fee, can eliminate "churning," a practice whereby a broker is running up commissions by making unnecessary transactions.
Additional ChargesDiscover all additional fees and charges you will be expected to pay.
“Deep Discount” BrokersBe cautious when you hear of “Deep Discount” brokers. Only use ones that are reliable and that you heard someone else uses them. And, remember always read the fine print. Lastly, if you do end up with someone you really are not satisfied with, you can always change.
If you have any other helpful tips or advice, please post them in the comment section. Thank you.
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