Stock market brokers are there to facilitate the trade of stocks for you. They do the buying and selling of your stocks and in some cases, they also provide additional services that help you make more informed choices.
Depending on what you need, your investment portfolio and your risk profile, there is a right stock market broker out there for you.
First things first, there are two kinds of brokers; the direct or regular brokers who deal directly with clients, and the broker-reseller, who are intermediaries between the client and the larger broker. There are also discount brokers and full-service brokers. Discount brokers carry out buy and sell orders at a reduced commission. While the full-service broker provides that and full investment advice. Assuming you are a rookie in the investment scene but you more or less know where you want to invest in, then the regular discount broker is probably what you are looking for.
However, if you are an intermediate investor and would need a more diverse portfolio to be managed, then a full-service broker might be able to help you. They usually offer researches that can help you in your decision to invest in certain stocks. So depending on your investor profile, you can pick a certain type of broker.
Secondly, you should consider the payment terms. Sometimes, it is more expensive for first time investors to pick the full-service brokers because they charge bigger fees so much so that the investor might end up with marginal profits. So before you sign up with one, make sure you have inquired about their service fees.
While we are in the discussion of fees, you should also ask your choice of brokers their minimum balances. The range varies but it usually amounts up to about $1,000. Check the minimum first and see if you can cover for it. On top of that, you should also check for the withdrawal fee.
Choosing your broker also depends on what kind of investor you are. If you are a day trader, you might need a broker than has low execution fees, given that you would be transacting a lot with them. If you are the long term investor, then you should check if your broker charges per transaction or if they charge a monthly retainer fee.
Lastly, check the profile of the broker before you sign up with them. Check their company profile and see if their records show satisfied customers. A good way to gauge if they match young investors such as yourself is to go there and see how well they will be able to accommodate your questions and concerns. Remember, you would be trading through them and if you are not at peace with how they deal with you now when no money is concerned, how much more when you are handing over sums of dollars to be traded. So do not hesitate to put them to the test.
Check reviews on their customer service. Go to their office and test it yourself! See if they listen to you and pay attention to your profile. It is important that they understand just what kind of service you are looking for.
In the end, finding the right broker for you is like picking the right stock. It really depends on what you want to achieve and you risk profile as an investor.