When it comes to investing, selecting the best broker could be the difference between building a solid investing foundation and one that is full of stress. Brokers that offer big amounts of discounts are necessarily not the best compared to the ones offering an easy to use website and platform. A platform with a robust offering education content is also beneficial especially for investors who are just learning the ropes. Below are some of the factors to consider when selecting brokerage firm for launching a career when it comes to investing in the stock or financial market.
Account Minimums
Brokerage firms come with a minimum amount of money that one must have in order to open an account and start trading. While deposits requirement skew towards $1000 or more, it does not mean that with less than $200, one cannot venture into the world of investing. There are highly ranked brokers that come with no account minimum thus perfect for people who have a few hundred dollars. Regardless of the amount of money, one has, finding a broker should not be difficult with extensive research.
Product Selections
Different brokers offer different investment alternatives. It is thus important to find a broker that offers a fine balance between stocks, municipal bonds, Mutual Funds, futures, ETFs options, and commodities. A broker that offers all the alternatives is perfect as it makes it easy for one to diversify an investment strategy.
Commissions and Fees
It is important to pay careful attention to the commissions and fees that a brokerage firm charges for opening and closing trades. Exchange and clearing fees have become complex thus important to first read the fine print before uploading any amount to a brokerage account. It is impossible to avoid account fees completely. However any investor especially beginners should ensure they minimize them as a way of saving on capital. Most brokers don’t charge a fee for depositing but will charge some money on withdrawals. Commissions also take a toll on an account when opening and closing trades thus important to select a broker that charges the least. Other common fees include, annual fees, inactivity fees, paper statement feeds and trading platform fees.
Trading Style
A brokerage firm should be selected based on the trading style that one plans to deploy. For beginners who don’t wish to trade more frequently, a broker that does not charge inactivity fee would be perfect. It is also important to look for brokers that offer investments at reasonable prices. Beginners should also settle for brokers that offer education material needed for launching an investment career. The material could come in the form of videos and tutorials or in-person seminars at branches.
Customer Service
There is nothing bad like being put on hold for more than 20 minutes when in need of some help. Beginners who have a lot of queries at the start should settle for brokers that are always ready to provide a response at any time of the day.
Bottom Line
No brokerage firm is sure to come with all the above-mentioned requirements. However, a firm that offers a good chunk of the stated requirements would be more than capable of supporting an illustrious investing career.
