How To Choose The Right Stockbroker

March 4, 2019 4:23 pm

Investing your money is a very smart move if you want to secure your finances in the future. But the world of investment can be very confusing and if you aren’t an expert, you can easily make the wrong decisions and lose your hard earned money. That’s where stockbrokers come in, they can make sensible decisions for you so you get the best returns and you can reduce the risk. But some stockbrokers are better than others and picking the right one is so important. If you don’t know where to start, here are some things you need to look for when choosing a financial advisor.

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Decide Where You Want To Invest

Even if you’re going to use a stockbroker to make your investments for you, you still need to understand the basics of trading. You can’t just hand them your money and tell them to invest it, you need to have some idea of where you want to invest your money. Different brokers will specialize in different areas so take some time to research your different options and make a decision. Then you can start looking for brokers that work with those types of investment.

The best way to decide where to invest your money is to think about your goals. Are you looking for long term, safe investments that appreciate over time or do you want to see a quick turnaround?  Deciding what your goals are will help you to decide which investment strategy is right for you.

CASS Automation

There are rules involved with holding client money that stockbrokers need to follow. These regulations are set out in the Client Assets Sourcebook and they’re designed to protect your money if your broker ends up in financial trouble. So, when you’re looking for a broker, you need somebody that follows those guidelines properly. Some brokers will use Autorek CASS solutions to automate their compliance which means that your money is going to be safer. It’s worth asking brokers whether they use these kinds of solutions before you make your decision.

Check Fees

All stockbrokers are going to take a cut of your investment but everybody has their own pricing structure. Some might take a flat rate while others will be entirely commission based, a lot of brokers charge account management fees on top as well. If you’re trading on international markets, you’ll have to pay currency conversion fees on top. Often, brokers will offer a price that seems very reasonable on the face of it but then charge you a lot of money in extra fees. If you’re not careful, you might end up losing a lot of your investment returns to your stockbroker. That’s why it’s so important that you check the fees thoroughly before you hand your money over to them. Get a full list of all of the fees that you have to pay and don’t get drawn in by a deal that seems too good to be true.

The stockbroker that you choose has a big impact on your investment success so make sure that you take the time to make an informed decision.

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