What to Look for When Choosing a Stock Broker
Summary: Planning to pick a stockbroker? Here’s our complete breakdown of the five things you need to look out for when choosing one.
We get it. Trading isn’t easy. And selecting a stockbroker? It could be even more challenging if you’re just getting started.
Selecting a stockbroker is one of the most important steps you will take to start investing.
Once you decide to take that first step and open a Demat account, you will be surprised to see the plethora of options available.
Selecting the right broker with the best product and services will give you the right start. A task well started is half done.
The best Indian discount brokers can be classified into traditional brokerages and discount brokerages.
Traditional brokerages are the oldest ones that give you full service and tips for a certain fee.
On the other hand, discount brokers are the new age ones giving online platforms without any tips. They offer cheap brokerage to new investors.
However, when you are considering the best stockbroker to open your Demat account, consider the following factors:
24*7 Customer Call Support
Since the stockbroker acts as a custodian of your investment, the customer service meted out should be nothing short of brilliant.
Right from opening a Demat account to carrying out transactions and holding on to investments, how a stockbroker treats their customer is of utmost significance.
The team should be knowledgeable, accessible, and responsive to attend to your queries and concerns 24X7.
On call support is must because I don’t think you would like to be stuck in the loop of an IVF when your hard earned money is on stake.
Apart from being available for their customers round the clock, find out what they’re doing to educate their customers (aka you, the investor).
First-time investors tend to depend a lot on their brokers.
Stock trading platforms that significantly contribute to increasing awareness among the investors will be a boon as they can help you stay abreast of the latest developments in the investment market.
Trading Platforms Offered
Check the trading platform offered by the broker—the technology, the user interface, ease of use, and technical features.
You can look at their demo videos on their website or social media platforms. You can also check if they have mobile apps and the ratings and reviews in Play Store or App Store.
It will give you a fair idea of how reliable the product is.
Further, the technology should be robust enough to support the sudden surges in user traffic and not give in to heavy load.
The least complaints in the SEBI Complaint Redress System (SCORES)
It is essential to select a trading platform that has built its brand in the market. Brand building takes a lot of consistent hard work over several years, transformed into goodwill.
These companies go to great lengths to protect their users and brand against any potential risk. Look for brokers who come clean with their regulator, SEBI.
You don’t want brokers who run a risk of being pulled up for fraud. That’s a strict no-no.
Great brokers build their name on customer service strength and almost nil disputes with clients.
Brokers With Robust Systems
Choose the brokers with sound systems in place to save you against Black Swan events.
A case in point is when crude oil prices plummeted to negative, a specific set of brokers were hardly affected– Rupeezy is one of them.
This signifies that your money is in safe hands with better systems in place.
Transparent Charges
The end goal of all financial pursuits is income—for you and the stockbroker.
Brokers charge you a commission or brokerage fee for each transaction, regardless of whether you make a profit.
Hence, go for a full service or discount broker that offers you the most transparent brokerage commissions without hidden costs.
While comparing, ensure that the broker does not have hidden costs and offers excellent value at a cheap brokerage.
Conclusion
There is really no shortage of options when looking for a stockbroker. And with how everything’s going digital, there’s so much to choose from!
You’re simply bombarded with options!
So it’s crucial that you make a wise and informed choice and choose one with the best mix of team, technology, products, fees, and services