6 Key Factors to Check While Selecting Your Stockbroker
Choosing the right stockbroker is very important and should be done as per your requirements. You should have knowledge of some factors that are needed to be considered while choosing a stockbroker. Additionally, you should also know which are the top stockbroker in 2021 which will make you choose better. All of this will be covered later in the article lets first look at who is a stockbroker and what are the benefits of having one.
Who is a Stockbroker?
A Stockbroker is an expert or professional trader who purchases and sells shares on behalf of his clients. Moreover, Stockbrokers are paid a commission that varies and depends on many factors. There are two types of stockbrokers: full-service brokers and discount brokers. Nowadays most of the order’s purchase and sale is done by online discount or full-service brokers. It helps to reduce fees and makes the process easier.
What are the benefits of having a stockbroker?
There are many benefits of having a stockbroker that can help individuals, investors, businesses, etc. Moreover, they are registered representatives that safeguard your transactions.
Advice: Stockbrokers offer advice on how to grow, manage and maintain your funds. Stockbrokers give professional advice to their clients for better decision-making.
Trading: Stockbroker executes trades in stock, commodity, option, mutual fund, etc for their clients.
Conflict: If there is any complaint or conflict with the stockbroker you can always report it. Moreover, for any queries, you can go to your stockbroker.
Rules and Regulations: Rules and Regulations govern a stockbroker which must be adhered to. They have the main motive of keeping their clients happy and content.
Record keeping: The records are well maintained and kept by the stockbroker. It makes the work easier and hassle-free.
6 Factors to check while selecting your stockbroker
You should have knowledge of the factors that are responsible for stockbroker selection. Moreover, due diligence is required to find the right stock broker to get the most for your money. Here are some of the factors that will help you choose the best online stockbroker.
1. Trading Platforms
Trading Platform is one of the important factors to consider to choose the best brokerage company. Moreover, the online trading platform should be speedy and user-friendly. The software should have features for technical analysis like charts, indicators, alerts, and much more. Additionally, market scanners help to track the market for better understanding.
The stockbroker should offer a good mobile trading app for better analysis. Also, look after your subjective trading needs. Shortlist some brokers and choose the best according to your needs.
2. Trading Costs
The next factor that you need to consider is Trading costs that involve AMC, Brokerage, Demat charges, taxes and transaction charges, etc. There are two ways in which stockbrokers charge their clients:
Percentage Based Brokerage:
A certain percentage of the whole trade value is charged as the brokerage fee.
Flat & Fixed Brokerage:
A flat fee is charged on every order that is executed without considering the trade value.
3. Research Capabilities
Stockbrokers have expert knowledge and can help better with research. When we talk about full-service broker offers detailed research that provides best insights for a better investment. Moreover, this research can help the investors make a better choice and can grab more opportunities. The research provides recommendations for trading calls and opportunities. Additionally, they also publish reports on market trends, IPOs, and the economy. So you should always look at the research capabilities of the stockbroker before you make your decision.
4. Customer Services
The next most influential factor for your choice is Customer service provided by the stockbroker despite it being online or physical. Additionally, many investors get stuck while using some stockbroker’s app, and there may be some technical issues that need instant repair. As each second in trading counts, good customer care is required for better performance. Customer care services like Online Customer Care, trading assistance, assistance for technical issues, Relation manager services, etc.
Online discount brokers offer customer care services online without any face-to-face interaction and still help with all difficulties. On the other hand, full-service brokers offer many services like branch services, relation management, etc, but they have feeble online customer services.
5. Look for Minimum Balance to be kept
Many times brokers ask for maintaining minimum balance when you open the account. You should always inquire about the minimum balance that you need to keep in your account. Moreover, it varies from broker to broker but having knowledge of it is very important and essential.
6. Check hidden costs and fees
Often brokers charge hidden fees in the name of some expense. Many times some brokers out of greed do not disclose some charges & fees for their benefit. You need to check for it beforehand before you make your decision.
Top Stockbrokers in 2021
Here is the list of top discount and full-service brokers in the year 2021.
Top 10 Discount Brokers 2021
Rank Broker
1 Zerodha
2 Upstox
3 5paisa
4 Groww
5 Alice Blue
6 SAMCO
7 Master Trust
8 Paytm Money
9 TradeSmart
10 Fyers
Top 10 Full-service Brokers 2021
Rank Broker
3 HDFC Securities
4 Kotak Securities
5 Sharekhan
7 AxisDirect
8 SBI Securities
9 IIFL Securities
10 Geojit
Key Takeaways
A trader/Investor should always pick the right stock broker that suits the best according to the requirements. An investor should always look at every option before coming to a conclusion. As we have provided the best brokers in both discount and full-service it will help for a better decision in the right direction.
Factors like Trading Platforms, Trading Costs, Research capabilities, Minimum Balance, checking hidden costs which are mentioned in the article should be considered. Other than these factors additional factors like Margin Facility & Leverage, Broker Reviews, etc should also be considered. You should compare all the available options by reading reviews. After you follow all these instructions you will be closer to finding your perfect stockbroker.
Originally published at https://steemit.com on February 22, 2021.