How can Beginners choose a stock broker?

How can beginners choose a stock broker?

Choosing a stockbroker is the first step to start your journey in stock markets. Without a stockbroker, there is no way you can invest/trade in the stock market Since the stock exchange alone cannot provide services to millions of investors at the same time, stock brokers eases trading for clients.

The stockbroker act as a bridge between client and stock market. Their job is to help the investor to buy and sell, shares for which they earn commission.

There are basically two kinds of brokers:

Full-service broker:

Full-service brokers provide you with research, trading and advisory facility. They charge a fix percentage on every trade that is executed.

They have their own research team who analyse and research on stocks on a daily basis. The brokerage fee is comparatively high compared to other brokers and therefore you should be careful before choosing your broker.

If you are new to investing in stock markets and need advisory services, you should opt for a full-service broker.

Discount broker:

Discount brokers only provide you with trading facilities. They do not provide you with any advisory services and charge a flat fee per transaction. If you are someone who is experienced or can make your own investment decisions in stock markets, you can opt for a discount broker.

Here are a few things you need to look into before opening an account with a broker:

1. Check broker charges: Before choosing any broker, check and compare charges of various brokers, see how much these brokers charge for both buying and selling a stock. You need to decide if you want to choose a full-service broker or discount broker, as the charges and services vary.

2. Customer service: When you opt for any broking firm look ensure that these services are available:

Trading terminal is easy to use and demo videos of using them are on YouTube
Customer friendly app
Provide information about stocks on regular basis. (If you are a beginner)
Easy transfer of funds from your bank account to trading account

Beginners should choose a full-service broker as they can guide you and provide proper customer service and listen to all your queries. You can try calling the customer help line number for any help. Many investors choose discount broker to save brokerage. On the other hand, there are several people who select full-service broker to save their time and energy while doing research. Overall, it totally depends on your time, knowledge and preference of choosing a broker.

3. Reviews from other customers: Check the background of the broker and read reviews and complaints online from other customers. Read the reviews of the mobile platform and check the mobile ratings on the app store.

4. Choose a broker who has many branches: Discount brokers have very few branches as compared to full-service brokers. If you opt for a discount broker find a branch in your locality where you can easily go and meet the customer care to clear your doubts.

5. Look for extras/add-ons Some brokers also offer some extras like no annual maintenance charges for first year or free education tools are offered to you. Make sure to take advantage of such add on’s