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Tips for choosing best stock broker for beginners

How to go about choosing the best stock broker for beginners in India in the field of stock broking? Choosing the best stock broker is also about choosing the best demat account for beginners. After all, your trading account opening and demat account opening typically happen simultaneously. So, which is the best stock broker in India and which is the best demat account for small investors. While we will not get into specific brokers, let us cover the parameters and factors that will help make this decision

Is the broker a respected name in the market?

This is quite subjective but the market feedback is rarely wrong. Talk to traders and investors and they will give you a proper feedback about the reputation of brokers. You can also check websites and news reports but just use them as supportive arguments. Check which brokers have the best demat account for beginners in India and which broker offers best shares to buy for beginners in India. The way the broker treats beginners in the market gives you a good idea of the sustainability of the broker model.

Does the broker offer a 2-in-1 account or 3-in-1 account?

From a retail investor point of view, the 2-in-1 account is more important than the 3-in-1 account. It is more critical to have the broker and the DP under the same head so that the process can be smooth. Even if your broker is not a bank, you can still allocate money from your bank account and the process can be equally seamless. The best trading account for beginners in India is the one that offers seamless 2-in-1 facility at the bare minimum. It overcomes a lot of procedural hassles pertaining to trading and demats.

How is the online trading platform of the broker?

Since online trading offers you the facility of trading from your home or your office, this is what is most preferred today. Best online stock broker for beginners is the one that offers speed and simplicity. If you have to search for the logical icons, it does not add value. Does the online trading platform of the broker enable you to go from any point to any point in less than 3 clicks? That is what ultimately matters.

What are the add-ons that the online trading site offers?

The best online trading sites for beginners are the ones that hand-hold you through the trading process. Trading is all about information, analysis, transparency and execution. Does your broker’s online website combine all these four factors? Your broker should ideally offers you a variety of screeners to shortlist stocks, provide short term trading ideas, give you powerful long term wealth creation ideas, simplify your navigation through the website, charts and technical support etc. Are the brokerage rates competitive and are there hidden costs?

 

A very important criterion for any trading account is the rate of brokerage charged. Obviously, no broker can practically offer you zero brokerage but the brokerage rates should be competitive. There is a cost to the service that the broker provides but you should be able to get value for money. More importantly, check for hidden costs. Some brokers may load costs like money transfer fee, service charges, mailing charges, download charges etc. Be wary of such charges being loaded. Prefer a brokerage structure that is value for money and is as transparent as possible.

 

How is the follow up services provided by the broker?

Remember, broking services are not just about executing transactions. It is also about the follow up services like updating the client via phone / email / SMS, helping the client when they are stuck in positions, despatch of contract notes on time, providing them online downloadable analytics and tax statements etc. Does the broker offer a call-n-trade facility as a back-up in case the internet services are down? Most importantly, ensure that the broker has good risk management. Brokers need to help clients but when they give too much leniency it amounts to bad risk management. Be cautious in such cases.

Does the broker offer a one-stop shop of all products?

This is a very important consideration. In fact, choosing the best stock broker for beginners also implies a broker who offers multiple products like equities, F&O, commodities, debt trading, interest rate futures, mutual fund advisory, insurance, loan products etc. The advantage of a one-stop shop is that you have all your needs met by a single one-point and that makes your entire task much easier. Focus more on the advisory services rather than just on selling products. After all, as an investor or a beginner in the stock market, you want solutions that are customised to you.

Lastly, is the broker in touch with the future?

This is very important because the nature of the broking business is changing rapidly in India. A broker who still sticks to old methods and ideas may not help you too far down the line. You need brokers who are able to offer you also driven solutions. You need automated advisory solutions for your personal finance needs. You also need brokers to provide you with technology-driven objective options for investment in a spectrum of products. All these will effectively add up to a good stock broker for you.

 

Spend time in the choice of your broker. Remember, your broker or your financial advisor is like a family doctor and is the key to managing your financial health and well-being. The more you sweat in peace, the less you bleed in war!