Let’s admit it, the internet has made it incredibly convenient for just about anyone to start investing. An online stock broker not only helps you with the trading process, but can also assist with accounts opening and options trading.
However, similar to any other thing, competition among online stock brokers is also getting fierce day by day. There are investors who are ready to pay hefty commissions for an up-to-date platform, others consider cost as a primary factor.
No matter what your priorities are, just be sure to do thorough research on your part before selecting a stock trading broker for yourself in 2019.
- Transaction Costs
Cost per trade also known as transaction cost is basically the price paid to trade a stock or any other security. Some of the typical examples of transaction costs include broker’s fee and spreads. Since such costs are quantitative in nature, it can be easily compared with the competitors. However, make sure that you don’t depend on a single cost as brokers generally have a huge range of commissions and fees.
It’s also important that you check out every associated cost. For instance, a broker with lowest cost per trade on stocks wouldn’t be a good choice for you if you mostly deal in options or your space of trade is mainly focused on mutual funds.
- Investment Options
One of the ways to gauge the credibility and effectiveness of the stock trading broker is to look into the variety of investment options you’re getting. As an old adage goes, never put all eggs in one basket. Similarly, you have to diversify your investment portfolio in order to acquire long-term growth and success in the trading business. Even if you’re willing to invest in a single security at this time, you have to consider the possibility of expanding your portfolio in the future.
- Minimum Initial Investment
You can find great brokers with no minimum initial investment requirement. But generally, brokers need you to deposit certain amount which may be thousands of dollars before getting started. If you’re a novice trader with little or no capital, it would make no sense to get in touch with the brokers whose minimum initial investment requirement is beyond your range.
Luckily, there are brokers who have no minimum deposit condition or require you to pay reasonable amount in the beginning.
- Keep Your Trading Style in Mind
If you’re not a seasoned trader, you probably won’t require high-end trading platform or other state-of-the-art trading tools and extras. But you may need some basic help and assistance. This could be in the shape of tutorials, videos or other training material available on the broker’s website. There are brokers who also offer in-person seminars and webinars to their clients. Usually, stock trading brokers offer these extra services FOR FREE to their registered users.
On the other hand, if you’re a high-volume trader, you may want to find a brokerage service that provides you with advanced trading platforms, research and analysis tools at discounts.
- Availability of the Retirement Accounts
Generally, all good brokers offer different types of retirement accounts to their clients, but it’s important that you confirm this before making a final decision. Even if you’re looking to open a basic investment account at the moment, you may want to invest in other retirement accounts in the future.
Ideally, you should discuss all these options with your broker as it can save you a strenuous research job afterwards.
- Interest on Uninvested Amounts
Although most stock trading brokers or brokerage firms do offer interest on uninvested amounts to their clients, not all do. Obviously, it’s not very difficult to ignore this feature when you’re getting 1% or less interest on your interest-bearing investments. However, it will become significant when the rate of interest becomes higher.
- Investment Advice
The trend of DIY investing has become immensely popular in the online investment space. But what if you’re not into this type of investment? This is where you’ll have to ascertain if a broker offers any direct investment advice. Also determine if this service is available for free or you have to pay extra charges to avail this service.
There are brokers who provide their clients with limited investment advice, while you can also find options that will offer a comprehensive investment advice to the traders. Keep in mind, if a broker is offering very low cost per trade, it may be because it’s not providing any assistance with the package. However, if you’re looking forward to hiring a broker that offers assistance, make sure to check this thing beforehand.
- Third-Party Reviews
This is certainly the most important aspect. Before registering yourself with any broker, get recommendations from other traders who are associated to that company. No matter how appealing the broker’s marketing is, there could be problems that aren’t visible to the occasional observer.
Similarly, be vigilant about trusting information, reviews and recommendations available on different comparison websites. These websites are generally doing affiliate marketing for the brokerage services.
You can identify these sites without much effort as they focus mainly on the sketchiest information and never highlight any drawback associated with the service.
- Customer Care
This is another important aspect that needs your consideration before selecting a broker for your trades. Make sure the brokerage service offers solid assistance to its clients. This support can either be in the form of email support or live assistance.
- Know Your Needs
Lastly, your choice of broker mainly relies on your own investment personality. Invest some time to know what exactly you’re expecting from your brokerage service. You can even make a list to avoid confusion. Determine which things are the most important for you. Also, make sure to carefully go through the broker’s website in order to get the better idea about the service.
There you have it! Don’t forget to compare your options so that you get the best value for your money.
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