Finding A Stock Market Broker For Your Investment Club
By Ultimate Trading
There Are A Lot Of Important Considerations Before Deciding Upon A Stock Market Broker
Every investment club needs to work with a
market broker. No one member of the club is going to be able to
provide the constant watch on the markets that is necessary to
provide up to date information on the stocks that your club may be
However, its a good idea to investigate several brokers, of
different types and have the club meet to discuss the various
options before making any decisions. While many investment clubs
will use a full time stock market broker who guides them and offers
advice at the occasional meeting, others prefer to use a discount
A discount stock market broker will give the club some detailed
information about stocks but wont give any advice about what to
sell or buy. Using a discount broker is generally a more popular
choice since the purpose of most investment club is to make their
own decisions about what stocks they want to be dealing with. In
addition, a discount broker does not charge the same commission as a
full time stock market broker.
The club may also want to consider using the services of an online
stock market broker. Online discount brokers will have low
commissions that can be a financial benefit to your club. On average
an online broker will charge $8 or less per transaction.
If your club decides to use a discount stock market broker youll
need to know how to find one. However, it wont matter too much what
discount stock market broker you decide to use so long as your club
is allowed to pick your own stocks.
The club should delegate one or two members to find the best
discount brokers that they can find, both on the Internet and
locally. Since there is a great deal of competition when it comes to
discount brokers the club will be able to get some great deals in
broker fees if you take the time to look for them.
There are a few things that you should keep in mind when youre
looking for a discount stock market broker, such as what sort of
customer service the broker offers, what fees they charge, and
whether they offer any other incentives to hire them. Youll be able
to see many discount brokers offering you their services both
locally and on the Internet.
In general, the fees charged by the stock market broker should be
quite low. However, keep in mind that choosing the stock market
broker with the lowest fee can mean you will end up receiving a
fairly low level of customer service. The club will need to decide
what aspect of the brokerage is more important to it.
If youre thinking about hiring your discount stock market broker
from the Internet there are some things that you should keep in
mind. Online brokers generally fall into one of three groups:
· Very inexpensive: If your investment group is planning on doing a
lot of buying and selling in the stock market youll want to think
about using a very inexpensive stock market broker for your
transactions. Most of these inexpensive brokers charge anywhere from
$4 to $12 per trade.
· Moderately priced: The mid range price that these brokers charge
is anywhere from $12 to $20 per trade.
· Expensive: Brokers that charge a high fee per trade often offer
you the best customer service so the price might be worth it to your
investment club. Youll have the opportunity to work with a broker
that gives you great service. These brokers generally charge
anywhere from $20 to $30 per trade.
When youre looking for an online
market broker you will be basing your decision on customer
service and the way the website operates. Take some time to look
carefully at the website. Youll want to make sure that the website
easy to navigate and the information is clearly presented.
Youll also want to know what type of customer service the stock
market broker offers. Youll be able to make your decision about
customer service after you conduct your first trade with the stock
market broker. Consider whether there are any other incentives
offered that might make you want to hire the stock market broker.
These can include:
· educational books and materials to buy at a discounted price or to
· air miles for your air mile program
· free Internet access
· a discount on your first trade
But the investment club shouldnt make its decision about what stock
market broker to use based solely on what extra incentives that are
offered. It should take consider all the different aspects of the
brokers carefully. But if it comes down to two or three brokers that
have caught the attention of members of your investment group, the
incentives might be enough to tip people towards one or the other.
Always keep in mind that the club can switch brokers at any time if
the members not happy with the broker theyve been working with.
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