When choosing an online broker, you will no doubt be looking to minimize your costs; however, you should also look closely at the quality of customer support.
The deeper penetration of the internet made it possible for investors to execute orders on their own using an online trading platform linked with the stockbroker’s system. According to Forbes, the brokerage not only maintains your brokerage account but also is the custodian of your investments. As convenient as online trading is, investors must choose the right online stockbroker to maximize their ROI and user satisfaction. Some key consideration in choosing an ideal online stockbroker:
Cost Per Trade
Unarguably the single most important consideration in online stock trading, the cost per trade can have a significant impact on your ROI. However, since brokers charge a variety of fees under different heads, you need to add them all up to arrive at the actual cost. Also, since brokers charge different rates of commissions on different investment products, you should pick a broker that charges the least on your most-preferred investment class.
Minimum Initial Investment
While some brokers have no or little minimum investment requirements, some online brokers may require you to invest many thousands of dollars. There is no point in selecting the best online broker if you cannot afford to comply with the minimum deposit requirement. The best thing is to decide how much you can afford to put down as a minimum investment and then go about the selection process, according to an Etrade editor review.
Asset Allocation Guidance
It can be quite challenging, especially for new investors, to properly allocate their investment assets since they need to continuously track their investments for a proper balance to be maintained between different asset classes. If you would not rather do this complicated exercise manually, you should search for a broker who offers this service, preferably with no additional charge. However, if the service is free, you can be sure that the rebalancing will be done automatically by computer programs, not manually by investment advisors.
Ease of Operation
The ease of use of an online broker’s website or trading platform should be one of your prime considerations for the selection of an online broker. If the platform is confusing to use or it takes several time-consuming steps to execute a trade, your productivity will be negatively impacted, especially if you are new to the game. Of course, if you are an experienced investor and looking out to use the more sophisticated features of a trading platform, you may wish to opt for a professional-grade trading platform.
Access to Investment Research
The secret of earning high rates of return on your investments is the amount of research you are capable of doing on price movements and other factors. You should look for an online broker that provides you with access to multiple sources of investment research free of charge as purchasing them separately can be very costly.
When choosing an online broker, you will no doubt be looking to minimize your costs; however, you should also look closely at the quality of customer support and personalized investment advice as these are likely to be among the most important considerations in making your investment portfolio more productive.