Stock brokers uncovered: How to open a broker account

Julie Brownlee, Fsp Invest, 09 Jul. 2015

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

If you’ve decided to invest, you won’t be able to buy a share until you have an account with a stock broker.

Stock brokers act as an intermediary between you and the stock exchange. No broker equals no shares.

So how can you open a broker account?

Read on to find out…

Find a stock broker

The first step to opening a broker account is to find a stock broker that meets your needs and requirements.

To open an account, you’ll need a minimum of around R10,000. You’ll find it difficult to open an account with less. Plus investing in small amounts isn’t wise due to the commissions and fees you pay when investing.

A great starting place is the Johannesburg Stock Exchange’s website. There you can access a list of all the stock brokers who’re members of the exchange. Go here to visit the page.

When picking a stock broker you want to check:

  • The minimum investment amount;
  • The services provided;
  • The fees and commissions charged for buying and selling shares; and
  • If you can invest over the phone and online via the stock broker’s platform.

You’ll find some brokers focus on high net worth individuals and corporations rather than smaller private investors. You can also check out what your bank offers you in terms of a share dealing account.

Open your broker account

Once you’ve selected a broker to open an account with, the next stage is the application form. You may be able to complete this online.

There are different types of broker accounts available. If you’re not sure which one is for you, read this article.

As well as completing an application form, you’ll also have to provide FICA documentation. For this you’ll need:

  • A certified copy of your ID;
  • Proof of your income tax number with SARS;
  • Proof of your residential address; and
  • Proof of your banking details.

Once the stock broker accepts your application, it’s time to transfer funds into your account. Then you can start investing.

So there you have it. How to open a broker account.

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