If you want to invest, you need to open an account with a stock broker… Here’s how to do it

Julie Brownlee, Fsp Invest, 18 Feb. 2015

Tags: stock broker, stock broking, opening a stock broking account, stock brokers, how to open an account with a stock broker, brokerage account,

Once you’ve decided you want to invest, you can’t go any further until you’ve opened an account with a stock broker.

So how do you do it?

Read on to find out…

Follow these three steps to open a stock broking account

Step #1: Make a short list of suitable stock brokers

There are a vast number of stock brokers operating in South Africa. But different brokers deal with different types of clients.

For instance, some brokers only trade on behalf of corporations or high-net worth individuals.

So you’re first step is finding a stock broker who deals with retail clients. And, most importantly, will allow you to open account with the funds you have.

Also the majority of brokers have a minimum amount that you must deposit to open an account. This can range from R2,000 upwards, but ideally you want to start your investing account off with a minimum of R30,000.

Go here to read more about why how much you invest in shares matters.

Step #2: Check out the fees and costs a stock broker charges

Once you’ve got a few stock brokers on your short list, take the time to go through the fees and costs they charge. And check what services are included with that.

Find out how much their annual management or administration charge is for the account too.

When you have all this information to hand, you can decide which stock broker is best for you.

Then pick your broker.

Step 3: Open an account with your chosen stock broker

Once you’ve made your decision, you need to apply to open your account.

As well as supplying your personal details, you’ll also have to provide certain documentation. This will include:

  • A certified copy of your ID book or passport;
  • Proof of your residential address, such as a copy of a utility bill;
  • Your income tax number on a letter from SARS; and
  • Proof of you banking details.

Once your broker opens your account, it’s a case of depositing your funds and you’re ready to invest.

So there you have it. How to open an account with a stock broker if you want to invest.

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