Getting ready to open your first discount brokerage account? If you are, or if you’re just wondering if the one you currently use is giving you the best service at the best prices, the Top 5 Features to look for are outlined for you below. Enjoy.
- How high (or low) are the trading commissions that you’re paying? If you’re using a logical system to execute your trades, you aren’t concerned whether they are executed extremely fast and you aren’t trading in and out very often, you should be paying between $7 and $20 for every trade. Any cheaper than that and you’re going to have difficulty getting someone on the phone to answer your questions, and any more than that and the service you receive should be close to perfect.
- What other Fees are you paying? There are plenty that your broker could charge you, that’s for sure, but you certainly don’t want to pay for any that you don’t need. Asset transfer fees, account closing fees, account inactivity fees, IRA custodian fees and minimum balance fees could all certainly be charged, but the question is should they be charging you based on the amount of trading that you’re doing.
- What is the Initial Minimum Deposit your broker is asking? Many brokers have minimums for opening an account and, if they do, you should find a broker that fits your budget best, especially if you’re just starting out. Finding one that fits your “comfort level” is important.
- Are you paying for Research? Many brokerages advertise their research as one of the best reasons to use their services but, with the vast amount of information online, including analyst reports, detailed financial data and real-time quotes, paying for that research is unnecessary (unless you’re exceedingly lazy).
- What type of Customer Service are you receiving? Just like you would spend time researching a particular company before you purchased their stock, researching a broker before you decide to sign with them is an excellent idea. Checking out things like whether or not their customer interface is intuitive, if they have customer service with live reps and if they answer their phones quickly when you call are great places to start. Choosing a broker with an office nearby might also be in your best interest too, if you want to talk with someone face-to-face about your questions and concerns.
All 5 of these Features are going to be important down the road as you begin to trade more and more, have questions, look for answers and grow your portfolio. It’s likely that you’ll have a relationship with your broker for quite a few years and, if you started on the right foot, that relationship will be both profitable and enjoyable.