InvestorQ : What factors to consider when selecting a broker?
Sam Eswaran made post

What factors to consider when selecting a broker?

Ria Jain answered.
3 years ago

You need to be extremely choosy when it comes to selecting your broker and that is where pedigree matters a lot. If you are looking at a broker purely from an execution point of view, then any discount broker can help you merely execute transactions at low brokerage levels. If you want to go one step beyond and get that genuine value-added service from your broker, then you need to get the services of a full service broker. A full service broker is one who gives research, specific advisory and helps you create wealth with minimal risk. That is where pedigree matters a lot. But, how do you judge the pedigree of the broker? There are the following simple tests…

Try to select a broker who has been around in the business for at least 10 years. Such brokers would have seen multiple bull and bear cycles and will be better equipped to guide you through market volatility

Check out the quality of research offered by the broker in question. Are they simply trying to push you towards a transaction or do they have a strong rationale and a compelling reason to recommend an investment idea? Market perception also matters a lot in this business.

Is the broker adequately capitalized? You surely do not want your broker to skip town when the going gets tough. You will surely feel more comfortable with brands that have been in the financial services business for a long time and have still managed to keep clients happy and also stay profitable.

Is the broker overly obtrusive about achievements and does not talk about the risks in the broking business? A truly pedigreed broker will tell you both sides of the story. There never has been a free lunch in the market and there never will be. Every attempt to earn returns entails risk and a pedigreed broker will always keep you informed about the risks.

Pedigree is not just about size or market share. It is a perception that is built over many years. Pedigree is hard to create and much harder to sustain. Look for brokers with pedigree!


Purvesh answered.
2 years ago
Sam, that's one of the questions every trader/investor has in India.
I have personally changed my broker twice and finally select Indiainfoline. This is my view as per the market. There are many others from which you can choose.
I prefer that you check below points before selecting Broker:
1) Past performance.
2) Account opening & Brokerage charges.
3) User-friendly platform to trade.
4) Customer Support - at least during market hours.
5) Your personal need.
There can be many others. These are my personal views.