Stockbroker : 5 Tips To Choose Your Online Broker
Stock market broker: 5 tips for choosing your online broker Online brokers, less expensive than traditional bank brokerage services, have become a must for all those who wish to invest in the stock market. If you don't know who to turn to, here are 5 tips for choosing your online broker.
1- Define your investment strategy
The first of our 5 tips for choosing your online broker is to clearly define your investment strategy.
Indeed, the best online broker is the one that matches your investor profile and will be able to meet your needs.
To properly assess your needs, you should consider the following criteria:
- your level of expertise in the stock market
- your risk tolerance
- the duration over which you wish to invest (short, medium or long term)
- the level of return you expect from this investment
2- Compare the offers
The second of our 5 tips for choosing your online broker is of course to comparing offers.
As with any other financial service, it's in your best interest to shop around.
Before you commit, find out about the financial products and rates offered by different brokers.
Read carefully the list of financial products offered by each broker and favor those that offer diversified moves: stocks of course, but also bonds, mutual funds, ETFs and trackers...
When you want to invest in the stock market, it is indeed essential to be able to diversify your portfolio to limit the risks.
3- Compare online brokerage fees
The question of brokerage fees is of course among our 5 tips for choosing an online broker.
When selecting this or that broker, it is legitimate to check the brokerage fees that will be applied by the broker on each transaction.
However, this criterion is not the only one you should consider. Don't give in too quickly to the sirens of attractive brokerage fees, when these unbeatable prices are subject to restrictive conditions!
Indeed, some online brokers propose very attractive offers, but only if you invest a minimum amount of capital or make a minimum number of purchases or sales.
4- Check the reputation of the online broker
Among our 5 tips for choosing an online broker, let's also add a common sense and cautionary tip. Before you commit, think about checking the broker's reputation on the Internet.
To do this, simply search the web, typing in a search engine the name of the brokerage company and the word 'review'.
This will flush out the reviews that customers have posted online on consumer forums.
Also, if you have any doubts about the honesty of a stockbroker and want to make sure their practices are not fraudulent, you can check their reputation with the AMF.
The AMF publishes blacklists and warnings against fraudulent offers (see link below).
5- Check the quality of the customer service
The last of our 5 tips for choosing your online broker is to check the quality and availability of customer service.
When choosing your stockbroker, pay particular attention to the characteristics of the customer service. This is a criterion that we don't always think about and yet it is crucial.
Is such a service offered? Is it easy to reach? What are the hours when this service can be reached by phone?
Indeed, in case of concern, you will appreciate that the online brokerage company is very reactive to solve your problem.