Choosing the Right Broker for You
The stock market is a complicated playing field. However, the rewards and return of investment (ROI) that can be gained from it attract and prompt more people to explore it. In our Back to Basics: Stock Market article, we see the value and the dynamics of the Philippine Stock Exchange. The stock market allows individuals to become owners of a company as they invest in the firm’s stocks. However, the uncertainty of the market becomes an intimidating factor for some people.
For this case, it would be a good idea for investors to hire a broker. Brokers serve as the “middleman” between investors and the stock market. In the Philippines, there are many brokers and brokerage firms that are willing to help investors get past their investment woes. For example, there are about 30 online PSE-accredited brokerage firms in the country that you can reach out to if you want to achieve your financial goals.
When opening an account with a brokerage firm, you will be required to deposit a certain amount of money to get started. Once you do this, the brokerage firm will start assisting you in the stock market, providing you less risk as you trade.
Now that you know what brokers and brokerage firms are, it’s time for you to determine which one fits your investment lifestyle. However, before choosing your broker, you need to consider several factors stated below. With them in mind, you will be able to find the best broker that could fit your needs.
Are you a newcomer or a veteran?
Choosing a broker you can work with can be a difficult task depending on how much you are willing to invest. For some, this may be their first time in the market. If you’re also a beginner in the stock market, you should primarily learn about the basics by doing your own research about the stock market then gauging how much you are willing to invest. Some online brokerage firms offer different fees when an investor makes an account. For some, they charge a minimum fee of Php 5,000. The broker you choose will really depend on your investment profile and spending lifestyle. It is therefore your responsibility to research about each broker and brokerage firm that could support you in your investment and trading journey.
On the other hand, if you’re an experienced veteran investor looking for ways to increase your financial gain or achieve your long-term financial goals that could possibly reach up to retirement, you can also tap a broker to help you with that. According to certified financial planner Ryan J. Marshall, investors can also open a brokerage account for their short-term goals such as paying down payments for a house or car.
Depending on your circumstances, you should start your investment journey by analyzing your investment lifestyle and plans and looking into a broker’s performance with previous clients and data from financial analysts. Checking a broker’s website can immediately show you the quality of their services and customer service, as well as reviews from their clients.
Making it official
While it can be said that the stock market has a lot of uncertainties, brokerage firms are subjected to the same risks. Some investors have experienced being scammed by a brokerage firm and even losing their money because the firm estimated the market wrong. There are also external factors that come into play that lead to brokerage firms closing down their business, leaving their clients behind in the maze of the stock market. It is therefore your task to find out whether a brokerage firm is trustworthy or not.
When looking for a broker, you should check if they’re accredited by official financial institutions related to the stock market. The Philippine Stock Exchange (PSE) already provides a list of accredited brokerage firms that you may consider. Part of the list are known firms such as COL Financial Group, BPI Securities Corporation, and BDO Nomura. The Security and Exchange Commission (SEC) of the Philippines also provides details of each company and a search feature in their website wherein you can find registered capital market participants. It is important for investors to be wary when they look for brokers—researching for and trusting credible sources such as the PSE and SEC will help you find a trustworthy broker that will stay and guide you in the long run.
The simpler the better
Another factor that you should look out for when choosing a broker is if they have platforms that will help you conveniently check investments and movement in the stock market. Some online brokerage firms have their own website or apps that investors can use to check their account and transaction to and from their investing portfolio any time of the day.
Easy-to-use apps may have features such as one-time passwords and quick withdrawal and deposit processes. Some apps also have an “auto buy” or “auto sell” option for when a stock reaches a certain price, allowing you to spend more time on other things that matter to you without looking at the stock market all the time. These features also help lessen the risk of your financial plan.
With these simple, secure, and user-friendly features, you won’t have to go through the hassle of learning the app while trying to reach your financial goals.
With platforms that you can check 24/7, you can be updated with account balances, stock allocation, and the performance of your investment. You may also place orders in the market outside working hours.
Of course, it goes without saying that you should pick a broker with good customer service as well as having an unresponsive broker may lead to issues in your investment. Some firms provide free consultation and seminars for those who want to know more about investing strategies. If you want to check customer feedback about a certain brokerage firm, you should read reviews from their previous and current clients. Broker Chooser has created their own analysis of several international brokerage services. Having a high quality customer experience shows that firms care about their clients by providing them excellent assistance.
The brokerage firm for you
Ultimately, the brokerage firm you choose will depend on your situation—whether it is starting out in the market, on the lookout for more investing strategies, or upgrading your financial plan, brokers are there to provide you assistance in the competitive market. Given that there is a lot to learn about the stock market, brokerage firms will assist you in investing for your dreams.
Therefore, it is important to be on the lookout for the stated characteristics that may make or break your journey in the stock market. Research and knowing your own investment lifestyle will help you decide how to properly create and trade investments in the long run.