A:

If you decide that you have the knowledge and experience to take on stock investing, or if you feel you would like to give it a shot without committing a large amount of money, an online/discount broker is a good choice. But with so many online brokers on the internet today, all offering the same basic services, it can be somewhat difficult to find a broker that stands out from the rest. To find one, just go to an internet search engine such as Google and type in "online brokers" and it should come up with a list of a number of different discount brokers. If you have no idea which to choose, try and narrow down the selection by looking at the fees and commissions they charge on each transaction and look at which ones offer the best promotions (e.g. 30 commission-free trades). Typically, the more well-known discount brokers such as Ameritrade, E*Trade or Charles Schwab, are very popular because they have the reputation to back up the services they offer.

Like many people who don't have a background in finance and lack the knowledge or experience to tackle the financial markets alone, an investment advisor is most likely the individual/service you'll need. However, unlike doing a quick online search for discount brokers, finding an investment advisor can be much more time consuming because almost every financial institution (i.e. financial supermarkets) today offers some type of investment account, not including all of the other independent investment brokers to choose from. One relatively easy way to find one would be to ask friends or family about whom they use and whether they are satisfied with their returns on investments.

If you don't know anyone who can help you find a broker, start by looking at brokerages that are most convenient for you in terms of location, reputation or where you do your banking. If you still find it difficult to choose, just pick a place and go in to speak with them about opening an account. Don't be afraid or a little intimidated because you know nothing about investments - investment brokerages don't expect you to know anything about investing and are more than happy to answer your questions.

After you have found a firm, go there and ask to speak with the branch manager or whoever is in charge. Introduce yourself and tell him or her that you are interested in opening an account and ask for a broker with a proven track record. After meeting the recommended broker, don't be afraid to ask a lot of questions - it's your money. A few questions to keep in mind would be:

  1. What are the broker's investment philosophies, beliefs and methods?
  2. What does he or she consider the top three investment books?
  3. Is the broker astute? Does he or she have initiative and subscribe to other investment websites or financial-information services instead of relying solely on the company's research department?

If a broker has any trouble answering any of these questions, you may want to keep looking.

(For more information, please check out our articles: Ten Things to Consider Before Selecting An Online Broker, Shopping For A Financial Advisor and Choosing a Compatible Broker.)

RELATED FAQS
  1. My broker just sold securities out of my account without my permission. Is this legal?

    Your broker's actions are not legal unless he or she sold the securities under certain conditions. Let's look at the two ... Read Answer >>
Related Articles
  1. Financial Advisor

    Is Your Broker Acting In Your Best Interest?

    Learn the clues you'll need to determine whether you've chosen a reputable professional.
  2. Financial Advisor

    How Brokerage Fees Work

    What you need to know about fees when choosing between a full service and discount broker.
  3. Investing

    Discount Broker

    A stockbroker who carries out buy and sell orders at a reduced commission compared to a full-service broker, but provides no investment advice.
  4. Investing

    5 Misconceptions About Discount Brokers

    While discount brokers are the perfect choice for some investors, their business model could be detrimental to others.
  5. Investing

    How to Pick the Right Stockbroker

    A stockbroker can play an invaluable role in growing your investments, but not all brokers are created equally. Use this guide.
  6. Trading

    10 Tips For Choosing An Online Broker

    This important investment decision happens before you pick your first stock. Here are some tips to get it right.
  7. Investing

    Why Use a Discount Broker?

    A discount broker is a stockbroker that does not offer clients investment advice, but trades shares for a smaller commission than a full-service broker.
  8. Financial Advisor

    Choosing A Compatible Broker

    We go over the factors that determine different investing personalities, and the services that best suit them.
  9. Trading

    The Best Low-Cost, Web-Based Trading Brokers

    With this table, investors can differentiate between top low-cost, web-based trading brokers by price, capabilities, and offerings.
RELATED TERMS
  1. Give Up

    A procedure in securities or commodities trading where the executing ...
  2. Deep Discount Broker

    An agent that mediates sales and exchanges between securities ...
  3. Forex Broker

    Firms that provide currency traders with access to a trading ...
  4. Business Broker

    A professional who specializes in the purchase and sale of companies. ...
  5. Broker

    1. An individual or firm that charges a fee or commission for ...
  6. Executing Broker

    The broker or dealer that finalizes and processes an order on ...
Hot Definitions
  1. Tax Liability

    The total amount of tax that an entity is legally obligated to pay to an authority as the result of the occurrence of a taxable ...
  2. Preferred Stock

    A class of ownership in a corporation that has a higher claim on its assets and earnings than common stock. Preferred shares ...
  3. Net Profit Margin

    Net Margin is the ratio of net profits to revenues for a company or business segment - typically expressed as a percentage ...
  4. Gross Margin

    A company's total sales revenue minus its cost of goods sold, divided by the total sales revenue, expressed as a percentage. ...
  5. Current Ratio

    The current ratio is a liquidity ratio measuring a company's ability to pay short-term and long-term obligations, also known ...
  6. SEC Form 13F

    A filing with the Securities and Exchange Commission (SEC), also known as the Information Required of Institutional Investment ...
Trading Center