How to find the Right Broker
for Your Trading Needs
Now that you have a clear understanding of your investment goals and what services you should keep an eye out for in your ideal brokerage, it’s time to narrow down your options a bit. While there are specific brokerage features that will be more appealing for some investors than for others, there are certain things any well-respected online brokerage should have. With such a broad selection of available options, checking on these basic requirements is a great way to quickly determine the direction you would like to take.
Trust and Regulation
Is There Any Kind of Guarantee of Protection Against Fraud?
Will the brokerage compensate you for losses resulting from fraud? Make sure you double-check what the company requires of you for you to be compensated. Find out if you have to provide any documentation or take certain precautions to protect yourself.
What Are Current Customers Saying?
Try searching online for user reviews of the brokerage, using keywords like “insurance claim,” “fraud protection” and “customer service.” Of course, online reviews should normally be taken with a grain of salt – some people just like to complain. However, if there are numerous users from different sites all submitting the same complaint then you may want to investigate further.
Online Security and Account Protection
It’s important to know how well a brokerage supports you in protecting your personal information.
Does the Brokerage Website Offer Two-Factor Authentication?
Do you have the option of activating a security feature in addition to your password?
Common options can include answering security questions, receiving unique, time-sensitive codes through text or email.
What Kind of Technology Does the Broker Use to Keep Your Account Secure?
Find out if the broker uses “cookies” or encryption, and if it explains how it uses them to keep your account information protected and how they function.
Does the Company Ever Sell Client Information to third parties (such as Advertisers)?
The answer should always be no.
Brokerage Account Offerings
Since the types of tools you require will depend on your objectives, you should also do a fast check for the following items to set apart brokerages that simply won’t meet your requirements.
Are There Different Products for Different Investing Objectives?
For example, seek out if the broker offers managed accounts. Also, seek out if there are investment minimums for different types of accounts.