If you want to know how to choose the best brokers when trading stocks, this article is for you. A broker gives you access to trade in the financial markets, allowing you to buy and sell shares, currencies, commodities, and bonds.
Most stockbrokers offer services with different fee structures, so your choice of a broker must be based on various criteria. It would help if you looked at the different types of fees involved in trading stocks.
Things to consider?
Different brokers offer different services, so it’s advisable to check their current promotions and whether they suit your needs. The best stockbroker will meet the required products and investment tools for you to make a profit in the financial markets. You should also consider that some brokers support more than one type of trading platform, which could give you access to even more opportunities.
As an investor, having access to multiple platforms can provide you with a chance to trade on multiple markets such as New York Stock Exchange (NYSE), NASDAQ, London Stock Exchange (LSE), or Tokyo Stock Exchange (TSE) with just one platform.
Different brokers support different platforms, so you must select a broker who supports the trading platform you want to trade on and the investment tools required to invest in various financial products such as stocks. In addition, some brokers have been known to offer their clients free access to research reports, which can give you an edge when making informed trades.
It would be best if you also looked at a broker’s policy for dealing with customer complaints. It will usually be displayed on a compliance section of its website and could entitle you to compensation if things go wrong. The best stockbroker will provide 24-hour support through telephone or online chat systems and have multiple languages available during market hours.
What to look for in your broker?
Choosing the best broker when trading stocks is vital to ensure you get the best deals and services from a company, translating into more profits.
- Commissions: Fees vary depending on the broker and type of account you have (e.g., regular, mini).
- Bid-ask spread: Some brokers may reduce or waive the spread based on the volume traded per day or other criteria in your account agreement with them.
- Holding fees deducted from assets in your account when trading stocks
- Account maintenance fees associated with trading stocks, usually monthly fees, are waived if the minimum balance requirement is met or you executed a certain number of trades in the previous month(s).
- Other fees involved when withdrawing money from an account such as check printing fees, wire transfer fees, etcetera (check your most recent statement for the accurate figure), as well as any other fees associated with account maintenance.
- The range of tools and services that may be offered for an additional cost, such as research reports, charting packages, use of certain third-party websites, etcetera (check your most recent statement for the accurate figure).
- Customer service support hours and available languages.
- How much experience the brokerage has in providing various financial products and services to their clients.
- The overall reputation of a broker: how long they’ve been in business; number and type of awards won; past performance (e.g., losses made by them or charges brought against them); news stories about complaints made against them; review(s) from previous customers who decided to no longer trade with them.
- The overall reputation of the parent company (e.g., does it have any other branches or companies attached to it? If so, what is their reputation?).
- What types of trading platforms is the broker compatible with and supports? Different trading platforms may be more suitable for unique investment strategies according to your preference(s).
- Does the broker provide any research reports, charts, software packages for an additional cost? It allows you to use advanced techniques available via third party websites/software instead of having limited capabilities by using only the ones offered through your account.
Lastly
Most importantly: how do you feel once you’ve dealt with this company? Do they treat you like a valued customer or just someone who is there to make them money?