2 crucial things to remember when you deal with your broker

Fsp Invest, 28 Aug. 2013

Tags: broker, stockbroker, service, pay, make sure you’re happy with your broker, stockbroking firms,

Your stockbroker isn’t just there to put trades on for you. There are other things that you should be able to rely on your broker for. Read on to uncover two crucial things to remember when dealing with your broker…

There are two important things to remember when you deal with your stockbroker, Gareth Stokes explains in Fear, Greed and the Stock Market.

The first is the broker is there to assist you in making your investment decisions and to help you with the specific mechanics of trading.

This means the broker should be prepared to take the time to discuss your individual needs when you open your account, and indeed when you place each trade. If the broker isn’t prepared to spend some time and effort to make you feel comfortable – then why should you invest your funds or conduct your trades there?

Remember, there are plenty of other stockbroking firms for you to choose from.

Don’t forget that you pay your broker for his services

The second fact is your broker makes money from your trading activity.

This means he’s not doing you any favours by taking your business. Don’t let him get away with making you feel as if he is... Your broker is there to offer you a service and is competing with a number of other businesses for your funds.

This means if you’re not happy with the service levels, you can just as well move your funds somewhere else.

Of course, you’re best making sure you’re happy with the broker from the start – because it does become more difficult to switch brokers once you’re holding shares.

You’ll have to arrange for transfer of the electronic certificates from one broker to the other – and you may end up paying additional and unnecessary fees.

It’s good to establish a relationship with one of the dealers at the stockbroking firm you eventually sign up with. It’s nice to include your dealer as one of the links in your network.

You can call him and chat about various rumours you might have heard, or ask him what he thinks of your own analysis of a company.

Never discount the importance of having someone ‘in the know’ to help you out.

There you have it, two crucial things to remember when dealing with your broker.

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