As a novice investor-to-be, one of the first steps you will have to take in order to begin your investment journey is choosing an equity broker. An equity broker is better understood if you split the term up; a depository participant/broker that lets you buy and sell equity, better known as stocks. Let’s take a look at five things you could keep in mind while choosing equity brokers.
1. Your goals.
As with most investments, there is no one-stop-shop solution for almost anything. Your investment strategy and equity broker choice will vary on the investment goals you have in mind, your investment capacity and how much risk you want to take on. For instance, if you wish to make long term investments, then you might want to opt for an equity broker that offers minimal account maintenance charges (AMC). Similarly, if you wish to make short term investments or day trade, you might go with an equity broker that has lower transaction fees on trades instead.
2. Services and customer care.
A broker is essentially in charge of your funds when you open a Demat account with the equity broker and deposit money. You should be able to feel comfortable with and confident in your discount broker’s ability to cater to all your needs, beyond the bare bones. Each investor has a different approach and methods. Be it a discount broker or full-service broker, ensuring that they will be able to cater to your specific needs is essential. Indian discount brokers are in abundance, allowing you a sea of choices.
3. Fees and charges.
While you are in the stock market to make money, keep in mind that your full service or discount broker is too. The key is to check to ensure that the discount broker is only making money from ways mentioned in their business model, and there are no hidden costs you find out about later. Carrying out a thorough check of your full service or discount brokers policies and charges can save you a number of sour surprises in the future.
4. History and reputation.
While the stringent guidelines and barriers to entry put in place by the government for Indian discount brokers and full-service brokers reduce the chances of large scale fraud etc, checking the history and reputation of your equity broker will help you ensure that the company has a good record of integrity, as you are trusting them with your money.
5. Account closure clauses.
While you might open your Demat account with a fervent drive, you must also account for an instance wherein you might no longer need that discount broker’s services and Demat account. While most brokers make the process of signing up seamless, ensure to check the account closure process to ensure it is equally as seamless, ensuring you are not trapped in paying your equity broker excess charges.
Indian discount brokers and full services are in abundance, and regardless of your requirements, you are likely to have more than one option to pick from. Surveying all Indian discount brokers and ensuring your equity broker is reputable and customer friendly is of paramount importance. This will go a long way in you becoming a successful trader in the equity markets.
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