A long article about brokerage…but I hope it is worth a read!!
Not all of us are proficient with the stock market. We all need help and assistance at some point of time. This is when a Stock broker comes into picture. A stock broker is somebody who can assist you with your investments. He is often associated with a brokerage firm or a broker-dealer. He acts as a guiding hand and helps you buy and sell your stocks in return for a fee, often known as the commission. Hiring the right broker to suit your needs might be challenging. These are some of the points that you need to keep in mind to get full advantage of the services that he offers.
- Ask questions: A broker is somebody who gets full access about your financial portfolio. You have given your broker full access to your financial details. Be doubly sure about his professional background, qualification and experience. Make sure to examine the registration details of your broker, either individually or through the brokerage firm. Every stock broker is required to be a member of a stock exchange as well as registered with SEBI. Get hold of his registration details. Also be clear about the investments that you will make. When in doubt about any of your investments, make sure that you get it cleared by asking n number of questions. Ask till you are satisfied is the key.
- Broker’s fee: Perform a background research of how much of commission is generally charged by brokers for the kind of service that you require. Largely, commissions are negotiable. Your stock broker should be competitive when it comes to commissions Try negotiating a mutually beneficially deal. Make sure that you review every penny that is being dealt with. Ensure that the commissions are being charged as per the agreed norms. Your broker is accountable for every rupee that is being used in your account.
- Take Complete Broker’s Service: It is all about value for your money. Though stock brokers are only a small part of the big stock market, one can make you a millionaire depending on how you take their services. A skilled professional can help with all the major aspects of the investment process, including initial planning. Communicate to your broker in plain terms about your financial goals. You need to provide him not just your money needs but also a time frame with in which you would want to accomplish this. If you are able to properly explain your financial requirements to your broker, he will provide the best solution available. Explain your requirement in clear and crisp terms to have a productive relationship with the broker. Ultimately, however, you’ll be responsible for every decision that you take, and not your broker! So make sure you are clear about your investments and are in charge about your finances.
- Don’t Hesitate to Expose a Fraud: If you think that your broker is cheating on you in manner, terminate your relationship. If your broker is churning your account in any mode that is not acceptable to you, you have all the right to fire him. Also make sure that this is reported to the right authorities. Every brokerage firm will have a Companies compliance officer. Make sure that you convey this information in the right manner. If your broker has really attempted to defraud you, he/she will individually be responsible for compensating the loss.