The advent of technology and automation has spread their wings in every sphere. Similarly in the field of stock market it has left a deep impact. The “open out-cry system” that prevailed few decades ago in the security market has been replaced by computer and broking system. The brokers are the middle man between a customer and a stock exchange. The question may arise that what is the source of income of the brokers? The answer is a simple one; the brokers earn their income through commissions on every security transaction. The broker charges a stipulated amount, known as brokerage from the customer at every purchase and sell that they make on security transactions. The brokerage is charged against the services that a broker renders to its customers. However, in this respect it should be kept in mind that a broker or a dealer does not make any money by setting a long-term financial plan for the customer. Nevertheless, in the present market situation most of the brokers in India render options to their customers with long term and short term investment guidelines to their respective customers.
This was all about a brief introduction of a broking firm; now the most important question that crops up is how to choose a stock broker? To play safe in the stock market you should get hold of a broking firm keeping the following guidelines in mind.
The very first thing that you should look for while choosing a stock broker is whether it is registered under the Securities and Exchange Board of India (SEBI).
If the Broker is registered under SEBI then it remains accountable to you at all point of time. If ever you face any difficulty with a particular broker then you can straight away intimate such to SEBI.
The next important point that you should keep in mind is your investment goals and services that you are looking for. Different brokers offer innumerable services, which may not satisfy your demands. Thus, before going for a stock broker, go through their service details.
There are mainly two types of brokers; discount brokers and full-service firms. Generally, the discount brokers often engage themselves in buying and selling with a low commission rate but hardly render any advice to their customers. On the other hand full service brokers have the potential to operate with you on different investment policies. In such ways you get the opportunity to implement your plans more effectively. Thus keeping these two types of brokers in your mind, you need to make a wise and balance judgment with your plans and go accordingly.
The most effective procedure that you can initiate while selecting a broker is applying the referral procedure. In simple words it means consult your friends and relatives who are already registered under a broker about the best broker that you can go for.
Now let’s get into some of the guidelines while choosing an accountant executive. An accountant and a dealer are the two persons who maintain every transaction in your account. These two persons are required to keep you up to date with the market situations and giving you the right suggestion accordingly. Thus your accountant and dealer should have the following few features.
Easy to talk to and comprehendible
Possess the potential to explain things properly
Doesn’t create pressure on you with any issues
Heed attention to your suggestions too
Coming back to the brokers; you should also remember to make a thorough inquiry about the investment philosophy of a particular broker that you choose and its procedure to handle clients.
Each broking house does the business with a profit making motive. Therefore, the broking house that you choose should make their compensation rate, fee structure and minimum purchase requirements apparent to you.
You should also find out how often the broking house that you have chosen checks in with you and with its other clients.
Last but not the least, always ask your broking house to provide you with few names of clients, who have the same background and investment plans same as you.
This was all about a brief introduction of a broking firm; now the most important question that crops up is how to choose a stock broker? To play safe in the stock market you should get hold of a broking firm keeping the following guidelines in mind.
The very first thing that you should look for while choosing a stock broker is whether it is registered under the Securities and Exchange Board of India (SEBI).
If the Broker is registered under SEBI then it remains accountable to you at all point of time. If ever you face any difficulty with a particular broker then you can straight away intimate such to SEBI.
The next important point that you should keep in mind is your investment goals and services that you are looking for. Different brokers offer innumerable services, which may not satisfy your demands. Thus, before going for a stock broker, go through their service details.
There are mainly two types of brokers; discount brokers and full-service firms. Generally, the discount brokers often engage themselves in buying and selling with a low commission rate but hardly render any advice to their customers. On the other hand full service brokers have the potential to operate with you on different investment policies. In such ways you get the opportunity to implement your plans more effectively. Thus keeping these two types of brokers in your mind, you need to make a wise and balance judgment with your plans and go accordingly.
The most effective procedure that you can initiate while selecting a broker is applying the referral procedure. In simple words it means consult your friends and relatives who are already registered under a broker about the best broker that you can go for.
Now let’s get into some of the guidelines while choosing an accountant executive. An accountant and a dealer are the two persons who maintain every transaction in your account. These two persons are required to keep you up to date with the market situations and giving you the right suggestion accordingly. Thus your accountant and dealer should have the following few features.
Easy to talk to and comprehendible
Possess the potential to explain things properly
Doesn’t create pressure on you with any issues
Heed attention to your suggestions too
Coming back to the brokers; you should also remember to make a thorough inquiry about the investment philosophy of a particular broker that you choose and its procedure to handle clients.
Each broking house does the business with a profit making motive. Therefore, the broking house that you choose should make their compensation rate, fee structure and minimum purchase requirements apparent to you.
You should also find out how often the broking house that you have chosen checks in with you and with its other clients.
Last but not the least, always ask your broking house to provide you with few names of clients, who have the same background and investment plans same as you.
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