How to Find a Discount Broker for Your
Investment Club
I
f your investment club has decided that it’s in
your best interests to use a discount broker you’ll need
to know how to find one.
It won’t matter what discount broker that you
decide to use so long as your club is being allowed to
pick your own stocks.
There is a great deal of competition when it
comes to discount brokers so you’ll be able to get some
great deals in broker fees if you take the time to look
for them.
Your investment club should delegate one or two
members to find the best discount brokers that they can
find, both on the Internet and locally.
There are a few things that you should keep in
mind when you’re looking for a discount
broker:
- Customer service that the broker
offers
- Fees
- Other incentives to hire the
broker
The fees that you have to pay the discount
broker will generally be quite low. You’ll be able to see
many discount brokers offering you their services both
locally and on the Internet.
However, many times choosing the discount broker
with the lowest fees means that you may be sacrificing
some customer service for this lower
fee.
You’ll have to decide if you want to trade low
price for customer service.
If you’re thinking about hiring your discount
broker from the Internet there are some things that you
should keep in mind.
Online brokers generally fall into one of three
groups:
Very inexpensive. If your investment group is planning on
doing a lot of buying and selling in the stock
market you’ll want to think about using a very
inexpensive broker for your transactions. Most of
these inexpensive brokers charge anywhere from $4
to $12 per trade.
Moderately priced. The mid range price that these brokers
charge is anywhere from $12 to $20 per
trade.
Expensive. Brokers that charge a high fee per trade
often offer you the best customer service so the
price might be worth it to your investment club.
You’ll have the opportunity to work with a broker
that gives you great service. These brokers
generally charge anywhere from $20 to $30 per
trade.
When you’re looking for a broker and basing your
decision on customer service and the way the website
operates you’ll want to take some time looking at the
broker’s website.
You’ll want to make sure that the website is
easy to use and easy to navigate.
You’ll want to know what type of customer
service the broker offers. You’ll soon be able to make
your decision about customer service after you conduct
your first trade with the broker.
Make sure that you find out if there are any
other incentives offered that make you want to hire the
broker.
Other perks that an online broker may offer
that can be of benefit to your investment club
include:
- educational books and materials to buy at a
discounted price or to read
online.
- air miles for your air mile
program
- free Internet access
- a discount on your first
trade
Your investment club shouldn’t make its decision
about what broker to use based on the extra incentives
that are offered.
Take your time when deciding what broker you’re
finally going to use. If it comes down to two or three
brokers that have caught the attention of members of your
investment group you’ll have to vote and have a majority
ruling.
Always keep in mind that you can switch brokers
at any time that you want if you’re not happy with the
first broker that you’ve been working with.
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