You have decided to invest in stocks and earn money, you’ve read interviews of people who have made a fortune in the market and you will feel it’s your turn now. Good for you. However, all these interviews don’t reveal one thing, the importance of a stock broker. A stock broker is as important as your Demat Account. Here’s how’s you choose the right stock broker.
Full service or Discount?
An essential choice to make for every trader. Full-service brokers or traditional brokers have been in existence for a long time. From helping you to setting up your Demat account to giving you investment advice, creating your portfolio, they make sure you are taken care. However, the cost is high too.
Discount brokers are not as old as full-service brokers, they don’t offer all these services. What they offer is high-speed trading platforms and charge a lower commission for buy and sell orders compared to traditional brokers. The trading here is done online. Understand your needs and budget before picking a broker.
Reputation
Once you have selected the type of brokers, you will come across various brands. Make sure the one you go with is reputed. A good way would be to go through SEBI’s website and check for any complaints filed against them. Talk to people about the services offered by firms to get a good idea. Talk to the broker to get a good idea about how knowledgeable they are and whether they are a sound firm.
Technology
This is important for those who go with discount brokers. Ensure the technology, trading platform, and software is top notch. It shouldn’t hang during trading hours or take a lot of time load or for funds transfer. In the market, every second counts and slow technology can only lead to losses.
Advice
This normally falls under full-service brokers. The quality of advice given to you can often determine your profits. The Relationship Manager (RM) and you need to have a clear understanding of your investment goals and then he or she should tailor the advice offered. Your RM needs to qualify and should be able to keep his or her cool during times of market volatility. A good RM can create wonders on your investments.
Cost
The factor which every investor is interested in. While traditional and discount brokers may offer different commissions for their service. It’s prudent to compare them with your investment goals and then come up with a number you are comfortable to pay as a fee. If you choose one, make it clear to the broker that any trade, any change in your Demat Account is only by your explicit permission and nobody else’s. The fee you pay and the money you invest is your choice only.
There a plethora of brokers in India and choosing one can be difficult. The above points will help you make the right choice. A good example for a broker is Reliance Securities who offer everything a trader needs at affordable rates and excellent customer service.