Earlier, the number of stock brokers was very less and it was difficult to find a good stock broker who could execute trades on your behalf. At present, with the onset of technology and digitization, you can easily find ample number of options available in the market. However, with the rising number of options, it is also very important to know which kind of broker is the right one for your investment and financial goals.
In order to make the right choice, it is important that you practice proper analysis with due diligence by keeping in mind the following factors while you choose a stock broker:
- Check for the broker’s background: It is very important to do a thorough background check of the broker and the brokerage firm. Check the past performance of the broker, how many years is he into the industry, client reviews, etc. In order to avoid being duped into frauds, it is important that you must do a thorough check of the broker’s background.
- Check for the availability: It is very important for a broker to be available most of the times in order to ensure timely execution of orders without any delays. This proves to be very beneficial for returns as stock market is very volatile in nature and often fluctuations in prices can be observed in a very short period of time.
- Check for the commission cost: All brokers charge a certain amount of commission in order to execute trades. Commission affects your returns as, higher the broker’s commission, the more it will hit your pocket every time you make a transaction. Make sure you compare commissions of different brokers before opening an account with a particular broker.
- Look for add-on financial services: Add-on services is always a benefit. Make sure you inquire about the add-on services provided by a broker. Compare the add-on services provided by different brokers and check how it will help you in achieving your financial goals.
- Returns on amount in the brokerage account: Some brokerage houses provide returns on the amount in your brokerage account. I Look for a broker who provides returns on the amount deposited in the brokerage account.
- Customer service: The most vital role of a broker is to provide good services. So, before choosing any broker, you must ensure if they are capable enough to provide good customer services. You can check with other clients for their past experience with the broker.
- Check for hidden charges and fees: Brokers often levy hidden charges from time to time in the name of some fees or expense. It is important for you to check for such charges beforehand.