Ensuring you get the most out of your investment means partnering with the right brokerage firm that will put your needs and goals first. Especially if you are new to investing, choosing the right stock broker is the difference between earning significantly or losing so much.
The nature of investments is that it is high risk, and there is no assurance about the returns. However, selecting an online brokerage you can trust can reduce the chances if total disappointment. Here’s everything you need to about choosing the best online broker.
Find what you need from the broker
Start with the services you can get from an online broker. The way you determine what it is you need is to evaluate what you know about investments and what your goals are. If this is your first time investing, chances are you would want a platform with resources you can study, support staff, and guidance when it comes to trade. On the other hand, if you have experience, you will want resources for higher-risk and higher-return investments so you can upgrade your portfolio.
Knowing what is important to you as an investor depends on what your investing goals are. Why are you investing in the first place? Is it just to supplement your current income? Are you planning to make this as your primary source of income? These will help guide you when you are looking for brokerage features that suit you.
Create a shortlist
Once your investing goals are clear, you will need to narrow down your options by looking at the features the top online brokerages have. For instance, the most important ones you need to look out for are if they are members of the Security Investor Protection Corporation and the Financial Industry Regulatory Authority. These two organisations ensure that you are able to make informed decisions when you invest and that you are given the right protection. Make sure that the online broker also has guidelines on protecting their investors in case the company fails and against fraud.
As for online protection, see if the brokerage offers a two-factor authentication and other security certification to ensure that your account remains safe from hacking and phishing.
Finally, look at what each online broker offers. Other than the standard taxable investment, what else do they have? Retirement accounts? How about other investing products for different investing goals?
Check the fees per transaction
It is important to know how much you will be paying for fees each time you make a transaction. Ideally, you should be able to choose an online broker that will make you lose only a small amount of your returns because of the fees and commissions. This also helps you consider online brokerages that fit your current budget.
Explore the platform
If you find online brokerages that allow you to create a free account, do take the time to explore their platform. Download and use any system that comes with the free platform so that you can get a good idea of how complicated or user-friendly it is. What you want is to choose a platform that is navigable and intuitive to use. Anything complicated than knowing which button to click and where to go, consider taking them off the list.
Once you have chosen an online platform, dive into every feature and resources they offer. Start thinking about what it is you want to achieve for each investment and maximise all the tools provided for you.
