When you need the assistance of a skilled person to complete the task of your investment it is often difficult to know where to turn. If it is all about finding a good broker who is most suitable for your purpose, it should be someone who understands your goal and use your money as if it is his own and will charge a reasonable fee for that service. Stock brokers are your financial agents who work for you in the stock market and charge a minimal amount of commission for their services. There are two types of stock brokers in general online and traditional—you have to know the type that suits you most.
It is very common that many investors enter into a relationship with a broker in the dark with very little or no knowledge at all about their backgrounds. This is undoubtedly a mistake. An intelligent investor is always well informed. They collect the right information and ask the right questions before entering any relationship with a broker. If you read the following paragraphs you will understand that they did never asked or looked for any answer that never came to your mind. They are all very obvious and should have come to your mind earlier and may be even some of them do came to you but you missed some relevant focuses in the issue. Here we will list them all one by one so that nothing misses your checklist. These are the factors you can use to evaluate your broker:
- Identify your goal: The first and foremost thing should be you have to determine your correct goal that you want to accomplish. This will help you to find the right type of broker you should look for or the broker, with whom you have a relationship already, is ideal for you.
- The Fees: The lower is always the best but compare what you miss at the cost of economy.
- Reliability and Accessibility: In stock market patient is often considered as an asset but timely prompt action is not less important in any way. Compare between online and traditional broker who is more readily accessible and competent enough to deliver your need.
- Convenience: If investing is a regular part of your life or even if it is not, you should have someone with whom you can contact and transact any time you need.
- Customer Service: This is a point that you should never miss in your evaluation. You must check the range of customer services the brokers offer. Consider only what you really need. Your broker should be efficient and maintain his/her promises and check the market trust they have made.
- Research: Conduct necessary researches, check whether any complain has ever been registered such as, disciplinary problems or been in trouble with regulators or other investors, and enquires about his / her experience in the trade. Is there any scope for negotiation? Learn about their charges, customer relation policy. Let him/ her understand that you have done necessary homework so that he/she can offer you the best deal. Check for their registration. Look for credentials and specialization services. Review their performance and track record.
Here are few questions that may help you either to find your best broker or to evaluate the performance of your existing broker.
- What experience does he has, especially with investors like you
- Ask about his educational background and experience in the business
- Whether he is registered under some body and the name of the registering authority
- Detail about his rate and fees structure
- Whether any disciplinary action was ever taken against him. If yes, for what reason.