What Should Your Brokerage Firm Do For You

The brokerage firm is an integral part of the stock investment. There are various types of brokerage firms, some banks provide demat account service while there are some independent brokerage firms. In the recent times, the discount brokers firms have gained a lot of popularity. As there are so many options available, it becomes extremely difficult for new investors to make the right choice of the brokerage firm.

The dazzling marketing gimmicks of the brokerage firms make rookie investors susceptible to buy things they don't require. As the onus of finding the right things and getting value for money lies entirely on the investors here are few things all the investor need to keep in mind while selecting a brokerage firm.

First Step - Identify Your Needs

Before selecting your brokerage firms, it's necessary to identify your investment needs. In simple terms, it means to know why you are getting into the equity market. Is it to invest or to trade

In brokerage firms, the set of services provided to both these types are completely different. For example, investors with a long-term Investment perspective need just a user-friendly terminal and efficient customer support. They don't need to get dazzled by the marketing gimmicks of the discount brokerages as in any case they are not going to engage in frequent buying and selling of the stocks. Hence, even if they are paying a brokerage a tad higher than others, it wouldn't make much difference.

On the other hand, for traders, even a trivial difference in the brokerage makes a world of a difference. As they are buying and selling stocks not just every day, but they do many trades in a single day they need the most cost-efficient brokerage service. Thus the primary step is to ascertain your investment needs.

Key Requirements For Traders

Intraday traders put their money in the market for a very short time. An intraday trade can last from a couple of minutes to a few hours, but a trader cannot hold the positions long or overnight as most of the times the trade is carried out on margin and has to be squared off before the end of the day's session. The objective of such trades is to buy a big quantity of a stock and capitalise on the minor movements of the stock. Thus for intraday traders, it's imperative to have accurate data on the real time basis as in an intraday trade every minute counts. For this, brokerage firms offer features like real-time market news and updates and trading tools and indicators. As an intraday trader executes many trades in a day, they mostly prefer a trading account with a flat brokerage.

Hi-end Technology & User-friendly Trading Platform: One of the most important things for the traders is to have an advanced and the state-of-the-art technology for trading. If you are investors, it's okay to just focus on the brokerage, but if you are a trader, along with brokerage, the technology aspect also becomes extremely important. Always make sure that the brokerage firm you are signing up with has a user-friendly interface (UI/UX) and is supported by good technology. Also, the terminal should work seamlessly and has to be efficient at the trading hours and should have easy navigation.

A Mobile App - The world is moving to the smartphones and so have investment and trading. Thus it's important that your brokerage firm has a well-equipped mobile app so you can trade on the go.

Key Requirements For Investors

If you are an investor, your focus should be on various things including the brokerage. If you are new to equity market then it helps to go with a full-service brokerage firm as it provides value-added services like stock advice, investment guidance and even tax advice, in some cases. They are little expensive but the reason full-service brokerages are so expensive is that they operate from big offices with branches spread across the country.

If you know your way around in the market then discount brokerage is your thing. They don't make big promises but just provide an investment platform armed with advanced technology. To be honest, that's all you need for the stock investment.

Source: How To Choose The Right Brokerage Firm

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