Picking A Qualified Stock Broker: What You Need To Know

Market fluctuations can make investing a risky activity for the average person, but those savvy enough to hire a trusted stock broker have made use of their insights to make considerable profits in recent years.

Markets like the Dow Jones have set a series of all-time records in 2017, making those who parked their money in an index fund look silly.

Only think the rich can afford to hire someone who can get amazing results? There are plenty of financial experts like Michael Briese who can provide good value for the money you pay them.

Leveraging a lifetime of experience in the stock market, he has cultivated the type of cold detachment from short-term results necessary to achieve spectacular long-term gains.

Want a broker with a similar mindset? In this article, we’ll go over the key points you need to keep in mind when picking a qualified stock broker.

1) Are they licensed to trade?

When looking for a broker, any candidate you consider should have the relevant licenses required to operate in their state and in America.

Make sure that they at least have a license issued by FINRA (Financial Industry Regulatory Authority), which is a body who polices the behavior of corporations and individuals working in finance.

Wildcat brokers may be able to get results, but the honest ones show they possess the responsibility required to save up the money needed for fees and to study for tests they need to pass to become certified.

As such, a licensed broker offers a greater degree of certainty that they will act in your best interest when investing your money.

2) Do you need investment advice?

Some have the knowledge needed to make smart investments – in this case, the broker simply places their order on their behalf.

However, most of us have more pressing concerns in our lives, so we would more than happy to pass off complex financial decision making to the professionals.

If you are in the latter group, go with a full-service broker, as they study major market segments on an ongoing basis to ensure they have the perspective needed to keep you in profit.

If you have a legitimate information advantage in one or more market segments, a discount broker may make sense, as you won’t have to pay the fees charged by their full-service counterparts.

Don’t try to be frugal when selecting a stock broker, though. Using discount brokers may save you cash upfront, but you will lose your shirt making poor decisions on your own, easily negating the quick savings at the start.

3) Shop around for a broker

Most brokers know how to turn on the charm when meeting a client for the first time. They will have you convinced that their fees can’t be beat – when they have you in a good mood, why would you ever question your new friend?

Many professionals will tell you what you want to hear to get your business. To make the best possible choice, talk to multiple brokers before making your final decision.

You’ll find a wide range of specialties and skills across a selection of brokers, some of whom may make more sense for you than others. Rates and commissions will also vary considerably, which is something you will never find out if you don’t shop around for the best deal.