Selecting A Good Broker

How to select a good broker?

The choice of the right broker can make an impactful difference in the trading outcome of the trader or investor. The payoff process, the ease of trading, maintenance of proper contract notes and a good trading software, all of these are dependent upon the actions of the broker. Hence, it is important to choose the right broker for trading successfully.

Click here to read more about contract notes.

Here are the tips to select the right stockbroker:

Conduct extensive research: A critical aspect of selecting a broker is to verify the reliability of the stockbroker through personal/online reviews. It is always recommended to have two separate demat accounts for trading & investment purposes. A genuine broker with good customer service will make sure you go a long-long way in your journey.
Full-service brokers or discount brokers: Brokers generally fall into either of the two categories: Discount brokers or Full-service brokers. The primary difference between the two is in terms of breaking charge. For instance, Broking fees in case of full-service brokers may go as high as 0.3% to 0.5%. This fee is charged both at the time of buying & selling a security. On the other hand, discount brokers charge a fixed fee, usually between ₹10-₹20 per order, irrespective of the order size. Full-service brokers charge higher fees since they also provide advisory services to their clients. Discount brokers on the other hand only play the role of an intermediary and execute trades on the client’s behalf. Opting for a discount broker can result in significant savings particularly if you have high order volumes. Some of the popular discount brokers in India are Zerodha, Upstox & Fyers. On the other hand, Sharekhan, ICICI Securities, Kotak Securities are a few reputed full-service brokers.
Quality of services provided: If you have decided to go with a discount broker, then you need to make sure that their website works efficiently and you are comfortable with their in-house trading application. Otherwise you can always opt for using the NEAT/BOLT platform. Also, the website should be able to handle huge traffic during peak hours. There is no doubt in the fact that technical difficulties do happen, but your broker should provide you with an alternative option to place your orders. He/She should be able to take your order over the phone and should offer these services at no additional costs.
Offers multiple investment options: You can invest in various investment options other than shares in share market such as Mutual funds, IPOs, Currencies, Commodities, Futures & Options, etc. It is best to select a broker that allows investments in all available alternatives.