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How to Find a Stock Broker - Exposed

J Nelson

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Part 1

One of the biggest mistakes an investor/trader will make is letting the stock broker choose him instead of the investor choosing the right broker. Being selective when choosing an agent can prove fruitful, ensuring you receive exactly the service and advice you deserve. There are many to choose from. Asking questions and screening can lead to a successful relationship for the investor and smooth out the rough roads on his investing journey.

Understanding the broker and his many functions is just one step in understanding the big picture of investing. Understanding one's own goals and purposes is more important, at least from the trader's viewpoint. What do you want to achieve financially? What areas do you want your investments? Are you comfortable with aggressive investing? Conservative investing? Do you really need a broker? As many traders as you have these days, you also have the same amount of different trading strategies. Will the trader need a different middleman if his/her strategies change?

Mastering a subject comes with the gradient accumulation of knowledge and experience on that subject. To assist those seeking a broker I've written a brief summary of guidelines and helpful hints. There are many questions, inquiries and investigative searches one can use to expose an agent's intentions and purposes. These will help you weed out the undesirable individuals not having their client's best interests at heart. These are not strict rules or policies but guidelines to help the trader arrive at his destination, which is making money through wise investments.

Having the right representative on your side is a huge asset. Each individual will have to examine his or her own personal situation to determine if these apply to their own plan on investing. My main focus here is Stock Brokers but these questions and investigations can be applied to many agents; Business, Commodity, Forex, Insurance, Mortgage, Real Estate, etc.


Basically he is someone who is licensed to buy and sell securities (financial instruments including stocks, bonds, notes, mortgages, etc. ) and derivatives (financial instrument whose value is based on another security) on the stock market for traders and investors, which could be either individuals or corporations.

Being a “Stock Broker" does not mean he is an all-knowing deity come to alleviate your financial woes. He has become such because he has a desire for investing and the markets and has invested the time in himself after a short study to obtain a “Series 7" license. This by no means makes him an expert in investing. This comes with time, experience and the passion to learn and do more.

They are not at all hard to find. Good ones are more difficult to find and they will have at least the following characteristics;

Understands the stock market game. Executes orders with high efficiency. Knowledgeable in most trading strategies. Good communication skills with his clients. Charges reasonable commissions. Offers other assistance as needed. Holds his client's trust as his biggest asset.

These assets are well worth having on your side when confronted with battling the stock markets.

Part of their job is to discuss and advise the client on investments and strategies. They should be able to explain in detail any aspect of investments and trades. He also needs to accumulate as much data about the client's financial status and goals in order to assist the client in attaining these ambitions. Based on this data the agent then determines the best financial route to follow and advises the client to do so. When the client has the trades executed they are charged a commission (fee charged for carrying out a transaction). Commissions will vary depending upon the level of service provided. The higher the involvement of the agent, the higher the commission costs is the usual case, which is justifiable for good service.

Paying a higher commission is worth it if he is putting together trades that consistently turn into profits. On the other hand, paying a lower commission which produces mediocre or no profits makes no sense and leads to frustration for the investor and broker alike.

Of course saving on commissions is increasing your profit ratio, but don't sacrifice your investment profits by employing a middleman who does not have your best interests at hand. Your main interest as a trader is to get all your trades executed efficiently and at the best commission cost possible for that service.

No matter what kind you employ, full service, discount or online, they must be efficient and quick to complete your trade in order for you to make a profit. A client's portfolio performance has nothing to do with commissions, but the amount of trades executed does. How is he being paid? Is he pushing certain financial products on you to receive more commissions? A good broker always safeguards his client's interests. Always.

There are three basic groups or types of agents; full service, discount and online. These groups each have different levels of service, advice, commission costs and each are unique depending upon the needs of the investor. Which service could best benefit you? Do you really need a broker? Is research and market advice really worth the extra commission cost?

J Nelson is a successful management administrator working within the customer service and finance industry for over 20 years. His interests also include photography, writing, astronomy and aircraft. J has written articles in regards to helping individuals overcome financial obstacles and finding workable solutions to those problems. Helping individuals locate real solutions is a very rewarding venture. Find out more at:


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