How To Identify A Good Stock Broker ?

Stock market investments basically include an investor who has a demat account and ample knowledge about the stock market. The good stock broker’s job is to provide the investor with both. Narrowing down on a stockbroker is as important and crucial as selecting the stock you want to invest in. But, before we get into the steps of shortlisting a broker, let’s first understand the types of brokers that we can choose from.

An investor can basically look at two types of brokers:

• Full-service broker: these institutions offer advice and recommendations for every investor. Since they do most of the groundwork for the investor, their services often seem costly for new investors.

• Discount broker: these brokers carry out the buy and sell functions for their clients without providing any advice, research, and planning. They often offer services at lower fees.

The decision to opt for a full-service broker or a discount broker depends on the extent of knowledge and skills of the investor. Depending on what kind of financial goals the investor is trying to meet and with what kind of financial status and knowledge of the market will determine whether they want to go for services that offer financial advice or not.

Full-service brokers can be helpful for those investors who are in need of some guidance, and they can be useful for those investors who want to stay at the top of their financial plans. Basically, it is a double-edged sword since these services can be fairly pricey for new investors and they can also act as a barrier in developing the investor’s knowledge.

Discount brokers can be beneficial for those who trade often and can use low commission charges. New investors also opt for discount brokers when they want to venture into the trading world and gather practical knowledge of the market.

Now, that we know the kind of brokers we must choose from, let’s look at the steps to take in order to get there.

What’s The Brokerage?

A major point to consider is the expenses you incur when you carry out a trade. Since stockbrokers are essentially registered members of the stock exchange, they can buy and sell shares for the investors directly. However, they charge a commission on top of the trades, which is known as the brokerage charge.

In the case of full-service brokers, these charges are higher, because they include advice and planning, but in case of a discount broker, these charges are lower. So, analyze the kind of trades you will be carrying out before you opt for a particular stock broker.

Trading Platform

In today’s digital age, it is very important to provide investors with ease of access and flexibility. These perks are extended to the investors through trading platforms offered by brokers. Before finalising, one must take a trial run of the platform and check whether the trading platform is fast and user-friendly or not.

The dynamic nature of the market makes every second count, and the platform you opt for should take this into consideration. The trades should be simple to carry out with easy-to-understand icons and menus.

Know about the good, the bad and the ugly of the stock market here:

Do They Educate You?

It is always advisable that beginners go for brokers that either offer physical or online training sessions and learning materials for the investor. The initial phase in the market can be very exhilarating and scary as well. It is essential for the investors to understand and internalize the fact that the market keeps changing, and one must be at the top of their game at all times with a hint of calmness and a load of patience.

The broker should provide educational videos and research reports to their customers, which can simplify their decision-making process and create a one-stop solution for all their stock market-related needs.

What Are Other Perks Offered?

Let’s assume you opt for one kind of service in the beginning to understand how the stockbroker is and how the market functions. Once there is clarity and you know you want to stick around, you should be aware of the services that you can add on to your existing package or scheme. It is very important that the broker offers you transparency and simple navigation in the beginning. As you progress, your trading graph does too, and the platform should be receptive to that and be able to extend analysis and charts in case you may want to refer.

The broker you choose should offer you products like commodities, F&O, mutual fund, and debt trading on top of equities and loan products. This way you can create your own portfolio in one place, which will be easier to manage and handle as well.

Customer Service

There are glitches everywhere, and at times, they are unavoidable. The important thing to note is how are the follow-up services and support facilities of any broker that you choose. Your queries should be answered and attended to immediately. You should also know whether the broker offers a call and trade service or any other such service that may not require you to be in front of a computer. At the same time, it is your job as an investor to manage the risks and trade responsibly.

Conclusion

Once you are sure that all these factors are in the right place, you must also be sure of whether the broker is sound considering the future possibilities or not. With automation on a hike, investors need everything from advisory services to trade execution weaved in a seamless process. In such a case, the investor should also know whether the broker is receptive to new trends and technology or not.

The crux of the matter is that it is important to take the time out to select and narrow down the broker of your dreams. One that extends all the services you would need to fulfill your financial goals and also is ready to take on new trends as and when they come in.

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