Looking for a broker? Read on to find a winner

To select a broker is akin to picking a stock, it has to done with consideration and research. A broker is your gateway into the markets and without the right broker, you stand to lose more money than you even start with.

If you are new to the market, the following tips are quite useful to have at the back of your head when you set out to choose a broker.

Type of broker you want:

Before you choose a broker, you need to know the type of broker you want. There are two types.

• Full service – They are traditional brokers who offer a range of services. Apart from helping you buy and sell shares, they offer services like research reports, stock recommendation, trading tips, and other advisory services like retirement planning, tax planning etc.
• Discount – Discount broking houses charge less compared to full service brokers but offer fewer services. Discount brokers offer high-speed trading platforms and excellent facilities. However, their services are mostly online. These are mainly for seasoned investors who know the ins and outs of the market.

Test your broker’s knowledge:

On you zero down on a broker, it’s vital to know that your broker is knowledgeable. Set up a meeting with him and ask him as many questions you want to gauge his skills and knowledge level.

If you ask you a broker about ‘share prices which will rise’ and the reply comes ‘Axis bank share price’, ask him why is it so? If you get a satisfactory reply then you should proceed. Never hesitate to ask questions because it’s your hard earned money you are paying him.

Check Research Reports and Data:

Many brokers will give you access to their research reports and data about the markets, commodities, and companies once you pick them. Request for a report before you choose them and go through it thoroughly, make sure the information provided, the graphs and charts prepared are genuine and factual, and not random data to win over novices.

Cost:

A broker will charge you a fee for services rendered. The most basic fee will be the Account Opening Fee and the annual maintenance charges (AMC) for the trading account. Then comes Demat opening fee and its AMC. You also pay a fee for every trade conducted as brokers are licensed to trade in the markets and not you. They trade on your behalf. You must know all the charges before you choose a broker.  A too good to be true fee is a bad sign and so is exorbitant fees, check and verify.

Does your broker force you?

Brokers are to give you a service where they listen to you and then sell or buy stocks. Their aim is to make you money. However, if a broker compels into choosing a stock you aren’t comfortable with or makes a trade without your authorization, then it’s time to bid adieu to such a broker. Your broker can offer you a variety of advice and tips, however, you have the final call.

Customer Service:

A broker’s service depends on making you money as well as excellent customer service. You need to be comfortable with your broker; you may have many questions, moments of panic or happiness due to market trends, unsure about India’s economy, or more. Your relationship with your broker needs to be good enough so that all such matters are resolved with calmness and efficiency.

If you are new, it’s advisable to go for full service brokers than discount brokers. A good broker to start with would be Sharekhan, they have branches everywhere making sure you don’t need to travel a lot and are well-equipped to help newcomers ease into the market and they make sure you are given the best customer service at reasonable rates.