Finding a good stock broker or investment broker is like finding a good apple from a bunch of similar looking bad ones. Once you find the most suitable one, you need to work on building a professional relationship with the broker. You need your broker to advise you as to which stocks you should invest in. Internet provides many sites which advise you on where to find a broker who fulfills your investment needs and charges less. You need to research well and ask many questions to get yourself a professional broker.
Brokers are basically needed to manage your accounts and advise you regarding the best stocks or funds to invest in. Many people are confused with what a stock broker does and what a stock market analyst does. The latter simply analyzes the stock market and predicts how a particular one will perform depending on how the stock behavior has been. A stock broker works for you and confirms or advises against your intentions of buying or selling a particular stock. Stock brokers have an educational background of business or finance and have to pass extremely difficult tests to get their license.
There are two kinds of brokers – full service brokers and discount brokers. A full service broker provides advice for your investment, investment strategies and tips and does a lot of research to help you profit. They charge a higher fee than discount brokers do. They may charge up to 2% of your trade or offer you a yearly rate. Discount brokers, on the other hand, do not provide any kind of investment advice. They merely buy or sell stocks and funds as you instruct them to. They point you towards the right direction with the help of basic research but the investor needs to perform the bulk of the research. They are not paid commissions. They are the cheapest solution and are known for their good service thus getting the best trades.
A professional broker earns his part of money from the commission when he sells your stocks. There are some who charge a fee for every transaction though. It would work this way – as your account gets more money, the fees increases. But mostly, a good stock broker earns a percentage of the money you make by buying or selling stocks. It is advisable to not to sign any financial statements you don’t understand. Interview as many brokers you want or search and compare as many online brokers sites you want before you make a decision. One should check with security regulators in the state if the investing broker you interviewed is registered properly or not.
The role of trust in a professional relationship between a broker and an investor is a very important one. Asking as many questions it takes to build that kind of a relationship is advised. The broker might throw you off with certain terms you are not aware of so it is better if you do your homework and know which questions need answers.