When you talk about the trading, it simply means trading of shares. So the share brokers are the very important and when you use the word broker, it refers to share broker. But it is well to everyone that in modern financial world, brokers are integral part of almost every investment in one form or another. So it is very much important to have right kind of broker on your side whether it are shares or mutual funds or something else. A right broker can make your investment experience rewarding and exciting. So while choosing a broker you need to be alert and careful regarding some standard capabilities, capacities, expertise and abilities of the brokerage house while serving and satisfying your investment needs. These capabilities, expertise and usefulness can be judged on some parameters that help to evaluate the performance of brokers. These parameters and criteria are as below:
You must check the registration of the broker by checking the website of the stock exchanges the broker claims to be member of. You should also ensure that your broker is member of both the biggest stock exchanges of India; BSE and NSE so that you can invest in all the possible stocks. In case your broker is member of just one exchange you will loose investments opportunities in some very attractive stocks.
Reliability is the most important aspect that needs to be checked and gauged while you are selecting a broker for your investments. How reliable the broker has been can be checked and gauged by various checks and balances. Before signing on the dotted line of brokerage agreement with any broker check the previous track records regarding the service quality as well as the tip quality of the shares from the existing clients as well as the timely payments of the extra funds lying with the broker. Timely services and timely payment is very important. This tells a lot about the broker ranging from the seriousness and approach regarding the business as well as the financial capabilities.
You must check what products the broker is offering. Before you sign to any broker it is imperative to check the products offerings of the broker. You must try to find a broker that offers all the financial products that you plan to invest or can invest in coming days. The broker should at least have online and offline stock trading, online IPO and online mutual funds. If the broker has other financial services such as insurance, portfolio services etc these are added benefits.
Online and Offline Platform
The broker must have a reliable and efficient online and offline trading platform certified by the SEBI and stock exchanges. Sometimes you may prefer to trade online and sometimes. If there are no online facilities available because any reason, the trader must be able to have offline trading facilities. Or you may be out of station and cannot execute a trade online so the broker should be able to execute orders offline on your instructions.
Brokerage Cost and Fees
You must check the brokerage costs and fees as this is going to affect the effective returns on your investments. For this purpose you are advised to cross check the brokerage costs and fees and compare with other brokers so that you can get the right information regarding the brokerage fees. You must negotiate the brokerage charges with the broker to bring it to the lowest possible level. If you trade in huge volumes regularly, then you must insist for lower brokerage.
It is added value if the broker has portfolio tracking facilities so that an investor can have tab on his investments. Currently almost every reputed broker offers this service. The portfolio tracking systems must have many sub accounts as well so that you can have tab on long term investments as well as the short term investments. This helps in adhering to the financial plan and you can gain most out of the money.
Research is backbone of the brokerage business so it is very much important how good the research capabilities of the broker’s are. In case of small brokers sometimes they depend on third party and outsource their researches. It needs to cross check with the existing customers.
Proximity with Your Location
It is important that your broker is nearby your office or the house so that you can contact him earliest in case any trouble.