Once you are at this page, it is pretty obvious that you have made up your mind on investing in stocks. It is a correct decision as investing in stocks can churn in huge returns if done in a proper manner. You would need to avail the services of a stock broker who can lend their expertise along with experience. But choice of the best share brokers in India is not easy as it sounds. A wrong decision on your part can spell trouble with considerable loss of time along with money. On course of your choice of your stock broker do not commit the below mentioned mistakes
- Do not choose a stock broker which your family or friend has chosen. The needs of each investor are different and what might suit someone may not work to your advantage.
- Do not blindly follow the advice of a stock broker. You would need to verify the numbers along with the facts he has stated
- Do not fall into the trap of advertisement gimmicks as most of them turn out to be frauds
In the quest of your choice of a stock broker, you would need to understand whether you are a trader, investor or could fall into both the categories.
Tips to be kept in mind in the choice of a stock broker
Type of Brokers
Once upon a time the entire classification of brokers was one dimensional. All stock brokers conduct trades on behalf of their clients and charge a small commission on each trade. It would mean that the higher the transaction value, the more you would need to shell out to the broker. The term given to such brokers was known as full service brokers. It continued up, until the last few years where the concept of discount brokers came into prominence. They do provide trading platforms and offering trading accounts to the clients. Their entire mode of operation through the online platform.
The pricing terms of each broker tends to vary significantly. Full service brokers charge percentage on the value of trades whereas the discount brokers have a flat brokerage rate. This is irrespective of the volume you have traded. As a client you need to have an idea about the brokerage you may end up paying to the brokers as it could eat up into your profits. It is suggested that you negotiate with your broker before you open an account. Be aware of the fact that brokerage charges are always negotiable.
Offline or Online Presence
A lot of times you would like to meet the stock broker on a one on one interaction. This discussion could be generic or to have a fair understanding about the market behaviour. This is where the physical presence of a stock broker takes centre stage. On the other hand in case of discount brokers this sort of facility is not provided. But it is one of the focal points of full service brokers.