Choosing from a list of stock brokers
It may be challenging to get a good stockbroker. Like it is the case with doctors, you will require time to know and even trust them. The chemistry between you and your broker will determine whether your relationship with him will work or not. There are some of them who will press hard to get business from you. Therefore, you should ensure that from the beginning, you are talking to various stockbrokers. Ask them all the questions that you feel are necessary even though they may look basic. The response to your questions will tell you more on what to expect from the stock broker. Where they seem not to have time to answer the questions, it will be a sign that you will not get maximum attention from them after you have given them business.
One important question that you should ask the broker is how and also how much they expect to be paid. It is necessary to note that brokers rarely volunteer this information and therefore, you are likely to be kept in the dark. In most of the cases, the broker that manage your account earn a percentage that is fixed of your account total. In return, they give you advice on the funds or stocks that you should invest in. At times, you may be required to pay extra fees, which are meant to direct you to investments or funds that are offered by the brokerage firm. However, a reliable stockbroker should pick for you only those investments that he feels are good for you.
When choosing the stockbroker, consider the margins and the commission rates. Your intention of investing is to make money in terms of profits. Where the margins and commissions for the stockbroker are so high, the profits will be low. When the stockbroker offers you advice, ensure that you read in between the lines. Ensure that the firm has your best interest in mind and will protect your money in turbulent times. Avoid signing documents or handing over any financial documents during your first meeting. This should only happen after you met several candidates and done your research well.
Be wary of those stock brokers who seem to suggest frequent trading. This is likely to generate commissions for the stock brokers and losses or weak profits for you as the client. There are unreliable brokers who exploit the situation to the maximum, engaging in short time trading without the consent of the client. Even though it may pay off for the client, particularly where the market is performing well, the main goal of the broker is to generate commissions, and it ends up backfiring. You should also check with the regulators of the state securities in your state before choosing a stockbroker. Yu will know whether the firm is well registered, the period that they have been in business and whether there are complaints or even disciplinary actions against them. It is also possible to get a list of the registered firms in your state and their phone number from the regulator.