As an investor, the need to cut down on the commissions is probably the number one reason to turn to an online stock broker as you seek to optimize your finance. It is therefore vital to do your homework and ensure you can identify an online broker who will adequately meet your needs but at the lowest cost.
Let’s look at 7 tips for choosing the right online broker.
Tip 1: Be mindful of their trading costs
Most online brokerage platforms will charge a flat rate for trades that is buying or selling orders. The transaction may then be subject to other miscellaneous fees such as direct routing fees or market data. It is therefore important to be mindful of all the costs you are likely to incur in a platform as this will affect your bottom line.
Tip 2: Having the right trading tools
Sometimes, it is never wise just to focus on cost cutting. Seasoned investors know that in some cases, lower costs come with diminished services. Therefore as an investor, it is important to know the trading tools that will be available to you on a platform to enable you make more informed trading decisions.
Tip 3: The available investment products
As an investor, you need access to a wide variety of trading options such as stocks, ETFs, mutual funds, futures and forex among others to increase your opportunities for financial returns. Therefore, it is important to ensure that the online broker you are using guarantees you access to all of them.
Tip 4: Access to mobile trading
Today, life is on the go. Therefore, as an investor, you need a trading platform that will enable you conduct your transactions while on the go so that even when on your frequent travels, you can still manage your account through your smartphone.
Tip 5: Ensure you can access 24/7 customer service
When working with online brokerage platforms, it is important to be guaranteed round the clock customer support. This could be the difference between making and losing a lot of money.
Tip 6: Access to stock analysis
The key to successful investment is having the right market data. It is for this reason that you must ensure the online brokerage platform gives you access to quality research and analysis to enable you make more informed trading decisions.
Tip 7: Ensure they are under some form of regulation
In the United States, stock brokers are regulated by the SEC and have to be members of SIPC and FINRA. Therefore, to verify whether the online broker you are using is regulated, you can simply search them through the FINRA broker check tool or when on the homepage of the broker’s platform, read their disclosures which are usually on the footer.
Due diligence is important and therefore must never be compromised.