10 TIPS FOR CHOOSING THE RIGHT ONLINE STOCKBROKER
04 / 04 / 23
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But how to choose the right broker. Here are ten tips for choosing the right professional who must be serious, reliable and experienced to meet the needs and expectations of the investor.
There are several providers online that offer their brokerage services, and some of them offer much better service than traditional brokers.
1. Choose a broker with a diverse and extensive offering
It is highly recommended that you choose a broker that offers a diverse and more comprehensive offering.
This type of service provider is a great help to individual investors who have no experience in the stock market.
It is an opportunity to gain confidence by becoming unobtrusively familiar with the mechanisms and functioning of the markets. Afterwards you will be able to take care of your own investment management.
Many stockbrokers provide investors with tools that can educate them about investing in the stock market, including webinars, informational documents, training and more. They can be contacted by phone and even online via chat.
In this way, finance and stock market experts are easily accessible to get information and get their opinions and advice. Moreover, it is better to check these elements before signing up with one of the brokers.
2. Check the availability and accessibility of the broker
You should test access to the broker's website and mobile app at different times of the day to make sure they are up and running properly, especially during peak and busy trading hours.
This approach is necessary to check the loading times of the website and app. Various features and links should also be checked to make sure there are no technical issues.
3. Availability of the broker at any time and place
Being able to contact the broker anywhere and anytime is of great importance.
Indeed, it is not always possible to be in front of a computer, so it is necessary to ensure that other means are available to communicate with him.
In this regard, connection to the platform should be possible through smartphones and tablets with all the functions of the site. Likewise, you need to make sure that navigating these tools is simple, flexible and intuitive.
You should also be able to place orders over the phone, especially since it can sometimes be difficult to access the Internet or have trouble recharging your battery.
4.Ensure the reputation and professionalism of the broker
Finding out about an online broker's reputation is necessary to know what kind of reputation it has in the marketplace. Therefore, you need to find out about its seriousness, its professionalism, and gather as much data about it as possible.
Don't forget to make sure that it is not blacklisted and that it has the permits required to conduct stock brokerage activities. Also, make sure that its head office is in a European country and not in an offshore area like Malta or Cyprus.
Indeed, these two places are chosen by brokers who want to take advantage of the flexibility of the rules in these two countries. It is best if the broker is based in one of the well-known European locations.
You should check the official notice page on the service provider's website. Otherwise, the Regafi website lists brokers who can perform and offer brokerage services.
5. Don't choose a broker based on price alone
It's best not to open an account with a broker just because of its low fees.
The fees charged vary widely in the market and range from less than 50 cents to about ten euros per order.
That said, too high commissions are not an indication of good service. We shouldn't get hung up on price alone, we should consider the quality of the broker and his services.
On the other hand, it is better to pay attention to the small print that mentions the services an investor can apply for.
In general, you should expect higher rates on international stock exchanges, especially for financial products other than stocks, as well as for telephone transactions.
Therefore, it is possible that the price displayed is not applicable to the type of transaction the investor is targeting.
6. Check the invested capital and the required profile with the broker
The investor should check the amount required to open an account with a brokerage firm. You should be careful when the minimum deposit is too high.
Indeed, some brokerage firms may require a minimum of €100,000 to open premium accounts. Such an amount may not be suitable for everyone, especially individuals.
It should also be borne in mind that some offers of premium accounts, options or subscriptions, which are less expensive, may be available only to active investors who carry out a minimum of transactions during a certain period, usually one month.
7. Control the number of products offered
It is in the investor's interest to make sure that the financial products offered by the brokerage are varied and in large numbers.
Because investors usually rush to French stocks, but there are other stock exchanges and a wide range of products, such as certificates, bonds, UCITS, EFTs and options, that should not be overlooked.
But before embarking on international markets and complex high leverage products, the broker must be able to provide the necessary information about these products and stock exchanges and effectively advise the investor to assist in the decision.
8. Choose a broker with quality customer service
It's not easy to wait ten minutes to get help.
That's why an investor should contact a broker's customer service team to request information, but above all, check the waiting period, even before opening their account with the appropriate broker.
Don't forget to look at studies and trophies that demonstrate the seriousness and professionalism of the team. A benchmark in this area is Investment Trends, which publishes an annual report on online brokerage services.
Each year, the firm conducts research based on a survey of thousands of individual investors in order to better understand the market and its trends.
This body gives out various awards, such as the Savings Files Award and the Customer Service of the Year Award, which measure the quality of service offered by various brokers.
9. Choose the brokerage accounts paid for by the broker of your choice.
When an investor keeps cash in their securities account, they think about taking advantage of the rewards offered by certain brokers.
The returns are usually very low, but even so, making money without any risk remains very attractive.
Therefore, it is better to inquire about the offer of the chosen broker on this topic. This may be a question to ask to verify customer service.
10. Compare prices instead of referring to stocks
Over the last ten years, the minimum amount required to place an order has been divided by 10. It went from €5 in 2006 to €0.45 in 2015.
But if that amount has been revised downward, it does not apply to brokerage commissions, which are stagnating as the market has reached a point of equilibrium.
And to stand out, brokerages often use promotional offers for a limited period of time. Therefore, you need to be aware of the influx of add-ons offered to new clients.
Nevertheless, you should not base your choice on a free 1,000 euros, you should compare the prices of the major brokers before making your choice.
A complete list of unscrupulous brokers, that we do not recommend working with is available here.
