Unless you’re a business or finance major, you will need the help of a broker to sort your investment, especially in handling stocks. These people will help you with the ins and outs of this business. Also, you should know that there is no way you could do this without owning a brokerage account. We’ll get to the details on how you could acquire that later, for now let’s focus on your getting your first broker.
If this is your first time, choosing your broker would be different from those who have been doing this for a long time now. You would be surprised that dealing with finding a broker is like handling and choosing the right stocks for your investment as well. That said, you must actually find the right match for you. Because if you don’t, I hate to break it to you but there’s a possibility you’ll end up penniless.
The first thing you need to know about picking the right broker is what exactly is their job description and how could they help you. You must know if you will get a regular broker or a broker-reseller. I’ll walk you through their differences.
The regular type of brokers is the ones that handle the whole investment deal with a direct client. The client will be hands-on working with them from the ground up. The other type, which are the broker-resellers are basically the middlemen dealing with a client and huge broker.
My advice is that go for a regular broker because they are more legit. There is a chance you could actually be ripped off when you deal with broker-resellers although of course, I am not saying it to generalize them, but it’s just wise to go for a regular broker if you’re just starting here. Should you ever decide to go with a broker-seller, make sure that you know them well and that you double-check every document before making a final decision.
I would advise to also go for brokers that are linked to reputable organizations that are known in this industry. Fidelity and Scottrade are among these and they are members of the Financial Industry Regulatory Authority.
You must also be aware that there are brokers who offer their full service and there are also ones that could give you discounts. Most people take the former even they are really expensive because they literally do all the job. As the investor, you will also gain a lot more than tips and suggestions in how you would deal with your stocks if you for the one who offers full service.
Aside from the obvious fact that you must go with a broker who is trustworthy, these are among the things that you must consider before going with one. And as much as I would want to tell you that you really don’t need their help, unfortunately you do. They are like the people who handle your taxes, which means you don’t have much choice but to trust them or you will have to do it yourself.