Trying to select and find a stockbroker can be like trying to pick good apples from bad!
Just because they have a few letters after their name doesn't mean they don't bear any bruises ...
Or that they're to be esteemed and trusted for that reason!
Frankly, a person novice at investing puts himself at the mercy of nothing more than a well-dressed salesperson!
Stock brokers who work on a commission and/or bonus often place their personal economic interest before yours!
The message here isn't to avoid getting a stockbroker, whose guidance more people could stand to receive, but rather, to exercise caution and due diligence when selecting an advisor and don't be afraid to "check up" on his work now and then.
Check your stockbroker about the following:
- Variable Fees
- Flat Fees
- How is he approaching investing?
- What are his criteria for making decisions?
- Ask if he has an interest or stake in any company whose products or services he recommends.
- And finally, drop by his office and do check it out!
Stock Brokers must be dedicated to achieving the financial goals of their customers by understanding their needs, by offering quality research, analysis, advice and opportunities and by providing fast, accurate, superior and expert service!
To many people the stock market seems pretty mysterious, and they're often tentative about making investments.
But believe me! You don't need an economics degree to learn how the markets work ...
But you do need the advice and experience of a good stockbroker!
Stock brokers today have a range of services tailored for the needs of the growing numbers of shareholders.
There are three levels of service you can take:
1. Dealing or Execution Only
You simply call the stockbroker and instruct them to buy or sell the shares you want. They carry out your instructions but will not give you any advice on your decision.
You can always take advice from another properly qualified financial adviser.
With this service you will get the benefit of the broker's expert advice.
They will discuss with you their views on various companies and recommend whether you should buy, sell or keep hold of your shares.
Make sure you feel comfortable with and understand what your broker is saying to you.
The broker will take all the buying and selling decisions, contact you regularly to keep you informed, and tell you how much your portfolio is worth.
Choosing a Stockbroker
Selecting a stockbroker to handle your securities transactions is an important process, but it's vital that you first understand your own investment philosophy and the services you'll require.
Determine how you will handle decision-making, your risk tolerance, your goals, the amount you'll be investing and how you'll be paying for your investments.
First time's a charm!
Many people investing in the stock market for the first time need a stockbroker to hold their hand through the process.
Not all brokers provide that, but an ideal broker, carefully chosen, is often the best way to start out.
Many first-time investors don't know the proper terminology involved in trades and can make an error when ordering from a busy trader who doesn't give advice.
Do not hesitate to ask friends, neighbors and business associates for recommendations.
Then go shopping among several different stock brokers!
Be candid about the amount of money you are willing to invest and how active you want your account to be.
A stockbroker who has been told that you want a stable, conservative portfolio will be less likely to call you with every hot new tip.
When interviewing potential brokers, find out how extensive the research information and trading resources of the firm are.
Building a relationship!
Don't allow yourself to be pressured or bullied. After all, it is your money. Discuss how often you may be likely to ask for specific price quotes.
If there is activity in a stock and conditions are changing rapidly, frequent price quotes should be no problem ...
But if you telephone simply out of routine or nervousness, you may be cutting into time that your stockbroker could better spend going over his research or otherwise monitoring the market.