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8 Important Things to Consider Before Choosing Your Stock Broker


Features that you need to confirm before choosing a broker

Although choosing the best broker is not an easy task, we offer 8 features that you should check and compare before choosing a stockbroker and opening an account.

Authenticity of the broker and the brokerage company
Customer Service
Minimum balance sheet requirements
Commissions and fees
Easy to lay and lift
Estimation of trading venue
Full service brokers versus discount brokers
Margin and impact

Quality 1: Asalah Al Waseet and Al Waseetah Company

It is very important to practice extensive background and authenticate brokers (as well as brokerages) before opening an account. Ask about the past performance of the broker, how many years he has worked in the stock market and look for customer reviews.

To avoid being involved in fraud, it is recommended that you visit the website of financial regulators or stock exchanges in your country and make sure that the broker is listed on the certified broker list.

For example, in India you can go to the SEBI website to check on a broker. To check brokers in the United States, visit the NASDAQ or NYSE website to check the stock.

The following is a list of countries with their respective regulatory authorities:


United States: National Futures Association (NFA) and CFTC
United Kingdom: Financial Enforcement Authority (FCA) and Prudential Regulatory Authority (PRA)
Australia: Australian Securities and Investments Authority (ASIC)
Switzerland: Swiss Federal Banking Commission (SFBC)
Germany: Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin)
France: Autorité des Marchés Financiers (AMF)
Canada: OSFI
India: India Securities Council (SEBI)

Quality 2: Customer service

Brokers and their trading platforms cannot be absolutely flawless (this is normal), so you should choose a broker you will easily contact in case of any problems.

Keep in mind that brokers can be very kind and helpful when opening an account, but they can have awesome after sales. A broker's experience in dealing with accounts or technical issues is no less important than their performance in executing a business.

You need to open a trading account with a broker who has a responsible customer service team and can answer any of your questions or resolve any issues.

Quality 3: Minimum Account Requirements


Brokers sometimes ask you to invest a minimum amount when opening a brokerage account. They may also require you to maintain a minimum account balance throughout the year.

This is done on purpose for a number of reasons. First of all, small bills do not apply much to large brokers. Second, many mutual funds also require minimal investment, which means that even if you open a brokerage account with a small deposit amount, you will find it difficult to invest in many profitable funds.

That is why it is very important that you inquire about the minimum amount that must be in your account. You can compare different brokers because this requirement varies greatly from broker to broker.

Quality 4: commission and fees


No matter what type of stock trader you are, you will always have to pay some fees. You may be charged for an account opening, maintenance fees, and brokerage fees for each transaction you can make.

Trading costs vary from broker to broker. Full service brokers charge more than discounted online brokers. The Delivery Trading Commission (CNC) ranges from 0.01% to 0.5%, while the Daily Trade Commission (MIS) ranges from 0.01% to 0.05%. The broker may charge a fixed fee or fee based on trading volume.



Broker commission has a big impact on your return, the higher the broker commission, the more you pocket your pocket, the more you trade. Before opening an account with a specific broker, be sure to compare the fee structure of different brokers.

But don't be blind to getting low commissions, sometimes it's worth sacrificing low transaction rates to select a more reliable broker. It's all about striking a good balance between lower transaction costs, security and the services provided.

Quality 5: Easy to lay and lift




Good brokers offer you easy ways to deposit money and withdraw money.

The only reason brokers keep their money is to facilitate a smooth trading experience. Therefore, there should be no reason why you should have trouble withdrawing your earnings. However, many intermediaries have a minimal balance that can prevent you from withdrawing money.

Quality 6: Review the trading platform


In online stock trading, most trading activities take place through a brokerage trading platform. This means that the trading platform offered by the broker must be user friendly and stable.

When selecting a broker, always check the features offered by their trading platform. Some common features to check: Are graphical and graphical tools easy to use? Do you give free news or price alerts? Do you have all the information you need to make your trading decision?

Quality 7: Numerous brokers versus discount brokers


In practice, each broker differs in his style of customer service.

Some may present themselves as full-service intermediaries providing access to a variety of trading and service platforms, while others may offer discounts and a basic service package.

Some of them may promise to assign you a dedicated account manager, who will be your direct contact in case of any problems.

As the name implies, full-service brokers offer a number of additional services to get brokerage investors involved, but they charge a higher commission for providing those services. The full-service broker also provides more individual advice, conducts market research for investors, and even offers personal suggestions.

Discount brokers, on the other hand, will not do much for you, it will only make your trading environment easier. The benefit is that they will receive a much lower commission compared to full-service brokers.

For younger investors, we recommend discounted brokers as it may not be beneficial to get full service brokers. Moreover, in this growing age of online discount brokers, they also offer a wide range of tools to help inexperienced investors. In addition, if you choose a discount broker and do market research yourself, you will learn many new things about investing in stocks.

Quality 8: margin and impact

The last thing to consider is the amount of leverage and margin that the broker offers to trade during the day.

Margin is basically the kind of loan offered by brokers that allows traders to utilize their capital stock. So a good margin means you can trade more than you already have in your account.

This amount varies greatly from broker to broker. It can range from 2: 1 to 50: 1 (or more), depending on the medium.

However, keep in mind that using high impact is a risky business. It's a double-edged sword. This means that loan-influenced deals can double your earnings on a good day, but losses can also increase on a bad day.

How to choose a stockbroker - summary

The wide range of options among stockbrokers makes it difficult for any investor to decide who to partner with. However, if you follow these 8 basic guidelines, you can probably choose the best broker for you.

Also keep in mind that the secret to choosing the best broker is to find a balance between all the properties. Choosing a broker that fits your trading method can significantly reduce your trading costs and increase the efficiency and security of your trading activities.


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