Selecting the right broker is as important as selecting the right stock. You need someone reliable, efficient and responsive to realize your goal of creating wealth through the stock markets. We look at the key factors to consider when choosing a broker from a number of stocks brokers in India, to make your investing more efficient and economical.
Why do you need a Stock Broker?
A stock broker is a firm that facilitates trading of financial securities such as company shares, mutual funds and bonds, between buyers and sellers. Every investor needs a broker to execute his trade promptly and economically.
Brokerages earn a fee from their clients for buying and selling securities. The fee structure and quantum vary, based on whether the broker is a full-service broker (who offers advice and recommendation with the trading) or a discount broker (who offers just trading).
When investors look at brokers, they hear sweeping statements from various stock brokers in India, stating – “Best broker in India”. It’s important therefore to know what makes a broker as such and if a broker is indeed as he claims to be.
Factors to Consider When Choosing a Stock Broker:
Any organization that deals with your money must have strong credentials. Your broker must be a known brand in the industry or if it’s a recent entrant it must be backed by credible names / investors. Going with a fly-by night operator, can cause irreparable damage to your finances. Also, look for profitable brokers, so there is a less chance of default with your margins.
A broker, particularly a discount broker, is as robust as his trading platform. The platform must be suited to your needs, allowing you to trade at crucial times to maximize gains or minimize losses effectively. It must offer the basic charts / analyses that other discount brokers offer.
The thing with discount brokers is that the cost is minimal, hence many of them claim to have the lowest brokerage charges. But some brokers pad up their annual maintenance fees and other visible costs to cover up for some hidden cost. Comparing specific costs across stock brokers in India, can explain the inconsistencies and identify the real cost-effective brokers.
After identifying a couple of brokers, it is best to do a reference check with your contacts on the broker and his services.
A stockbroker with long-standing track record and credentials, offering a robust trading platform with commendable sales service is a must for any investing looking at building wealth via stock markets. While the process of identifying the best broker in India may not be easy, it is worth investing time and effort in identifying those one or two brokers who fit the bill.