When you choose a stock broker to manage your investments you are taking a risk. This person is usually getting a commission on the basis that they make you money, but there can also be other fees as well. If the stock broker doesn’t really know what they are doing though, they could be losing your money instead of adding to it. There are things you can do to establish if your stock broker actually is all you want them to be.
Is Your Stock Broker Worth Their Commission?
Here are just some of the ways you can determine if your stock broker is worth their commission.
The more information you know about your stock broker the better. Ask them lots of questions to determine their background and their dedication to the job. You can learn an awful lot from your interactions with these people, and even an email of only a few lines can tell you a lot about where they are at. If the stock broker doesn’t seem to treat you with much respect then the chances are they will have even less respect for your money. Don’t worry about appearing nosy by asking a lot of questions; you deserve to know as much as possible about the people who are handing your investments.
It is important that you not only read your monthly statements from your broker but that you also fully understand them. Check all the calculations and don’t just assume they are correct. Sometimes people make mistakes but other times faulty calculations can be due to more suspicious actions. There is different software applications that you can install on your computer so that you can better follow what the information in your statements is actually telling you.
It is important that you have good communication between you and your broker. You will need to make clear your desires and they should make clear their ability to meet them. If there is not good communication between you and the broker you will be best taking your business elsewhere.
Make sure you do a full search of the stock broker and their company. You will find a lot of the information you need is available for free online. You should be able to find out a lot about the reputation of the firm and maybe even that particular broker. If people are giving negative reviews of the company then you will probably be advised to steer clear. Of course you might not want to dismiss a firm on the basis of just one or two bad reports if there are other good reports.
It is important that you benchmark the performance of the stock broker to keep an eye on how they are doing. The way you do this is by comparing the stock broker against the more popular share indexes. You might want to let your broker know that you are evaluating their performance and that if they don’t meet the grade you will be taking your business elsewhere.