According to Rowan Relton, choosing the right broker is the first step towards having a successful investing career. However, finding the right broker is not easy. The best approach is to make a list of facilities you want from your broker. Here are a few tips on how to zero in on the best.
One of the primary requirements for investing in stocks is having a broking account. Many people think that there is no difference between one broker and the other. This is not true. Finding the right broker is not easy. The best approach is to make a list of facilities you want from your broker. Here are some pointers recommended by Rowan Relton that you must consider.
Costs:
Consider the commissions and other fees that broking companies charge. But don’t over-emphasise the point. Also, understand the facilities offered. All brokerage houses have at least two plans. One is usually for intra-day traders and the other is more suitable for long-term investors, says Rowan Relton.
Minimum Trades:
Check if there is a clause or subclause about minimum trades that you will have to do as well as the penalty for not complying with the requirement. 3-in-1 accounts come with a savings account. In such a scenario, some banks have rules about minimum balance.
Mutual funds and other investment options:
If you’d like to buy and sell mutual funds through your brokerage account, look into the funds that the brokerage has tied up with and the services it offers. If you want to invest in options, exchange-traded funds, or ETFs, or fixed deposits, ask whether the brokerage offers these products. The costs of these services must also be looked into, says Rowan Relton. For example, discount brokers do not offer such facilities, but full-service brokers do. Some fullservice brokers may not offer products of all asset management companies or AMCs.
Rowan Relton - Trading Professional 