How To Find A Right Stock Broker?
The financial market is broad in its scope as it deals with various securities, derivatives, bonds, funds, currencies including the cryptocurrencies and so on. Investing in this market becomes comfortable only with the assistance of brokers or agents as they have a thorough knowledge of the market movements and trading methodology. There are plenty of stockbrokers in the market today with different stages and levels of work experiences. Choosing a right stock broker decides your fate on the investment.
In the earlier times, i.e., before the advent of the internet, the trading market was boomed with the profit earned majorly by the stock brokers. They charged high percentage commission as they were the only people authorized to trade in the market. With the advent of the internet, trading became easy for many investors as they get to learn much information from the internet. Investors now use the search engines and choose the best broker who shall satisfy the investment requirement according to their needs. Below are the common types of brokers available in the market.
1) Online brokers: Otherwise called as discount brokers are straightforward and their scope of work is limited. They take order either over telephonic conversation or online. Online brokers generally don’t help or advise investors on the investment options, technicalities, and market tactics. Their role is to execute trade upon customer’s request.
2) Online brokers with assistance: Their job profile is a level above the discount brokers. These brokers provide investment tips and offer few trading services to the customers. They do charge an additional commission for the assistance provided. The assistance provided may help the customers to trade efficiently and earn a decent return from trading.
3) Full-service broker: Apart from the role of buying and selling of stocks, these stockbrokers provide other services to the customers. These services include analyzing the financial condition of the customer, assessing his financial needs, the need for investment, the type of stock to be invested, the term or the maturity value and the amount to be invested. Based on the source provided, the broker puts together an investing plan for the customer wherein they review the progress of their investment and make required adjustments as per their needs. Availing the service of a full-service broker is advisable when customer lack interest in trading or has no time to monitor the market. Their commission is relatively higher when compared to the above brokers.
4) Money Manager: Money managers are the brokers who take over the entire responsibility for investing and managing the investment portfolio of a customer. This is expensive and one must have a hefty sum if you are looking for such broker.
Regardless of broker you choose, one must carry proper due diligence about the broker and the stock they propose to invest before undertaking any decision in order to avoid incurring any trading loss.