As tempting as it is to just choose the first financial broker on sight, it can lead to future irreversible problems and challenges! There are many financial brokers available for your lending pleasure, but choosing the best goes beyond picking a random one that appears “reputable” or looks good on paper. There are certain factors you should consider before taking the plunge.
Here are 5 of those considerations:
1. Fees and Costs
This is especially important if you are working with a shoestring budget. Learn the fees associated with the brokerage firm or platform you intend to use. It is above or below budget? Can you afford the broker’s fee? Is it worth stretching your budget? Some fees associated with brokerage firms include :
Withdrawal fees: You may be expected to pay a certain amount before making a withdrawal or attain a certain balance in your account before withdrawing.
Minimum account: Generally, brokers expect you to have a minimum balance when setting up your account — this refers to a stipulated amount that qualifies your account for investments or loans.
2. Are they Reputable?
You can answer this question by conducting a thorough background check on your intending brokerage platform. Thankfully, the internet has made this possible and easy. Check previous customer reviews and note the comments. Consider their years of experience and past performance to know if the broker is reputable and can be trusted to deliver. Also, don’t assume that popularity equates to credibility. They may be well-known or touted for the wrong reasons! So do your homework.
3. Customer Support Service
You never know how important reliable customer service is until you want to urgently speak to your broker and they are unreachable! Some brokers might appear accommodating and receptive at first to win your commitment, and then display poor customer service when the deal is sealed. As such, pay rapt attention to past customer reviews as those can genuinely tell you how good or how poor their customer service is.
4. Evaluate Your Investment Style
You need to ascertain if your investment style aligns with the services your prospective broker promises to offer. Your investment style also includes your risk tolerance. Are you highly risk-averse or you can tolerate both high and low-risk deals? Check these considerations on your list before saying yes to that financial broker!
5. What Services Do They Offer?
There are different types of financial brokers, offering different services. However, they majorly fall into two categories; full-service brokers and discount brokers. Full-service brokers arrange consultations with you and handle all the paperwork necessary to execute your investment or loan. They may also offer financial advice to steer you in the right investment direction.
Discount brokers on the other hand provide tools to aid your investment journey at discounted rates, however, you have to do the bulk of the work. So you need to consider the type of service your prospective broker is offering and if it meets your needs. You also need to consider if you want a loan, an investment or want to sell assets. Then proceed to check if you can get your required service from the brokerage company or platform.
The Bottom Line
Don’t “blindly” choose a financial broker as your decision might make or mar your future financial position. Consider everything worth considering — from the broker’s credibility to the services they offer to their customer support team and their cost and charges. Remember, choosing a financial broker is a major life decision and should be treated with utmost caution and consideration!