The median amount of money that British families have in their savings account is approximately £4,000
While this is certainly better than £0, it won’t take you very far in an emergency or when put toward your retirement.
But, imagine growing this £11,000 exponentially in a long (or even relatively short) period of time. That’s where investing comes in.
The problem is, most people are clueless about how the stock market works. That’s why they turn to brokers to assist them. But, you need to pick one who’s reliable.
Not sure where to start? Don’t worry, we’ve got you covered.
Let’s take a look at everything you need to know about broker trading and how to make the most of it.
So, What Is a Broker?
A broker is someone who essentially serves as the manager for your funds that you invest. It’s their job to make stock transactions on your behalf (with your permission, of course).
Brokers work at firms called brokerages, places built around the idea of providing financial management service to clients through the form of stock trading.
How Does Somebody Become One?
Becoming a broker isn’t like applying for most other jobs. You’re going to need your Series 7 and Series 63 certifications before a firm will even consider you for the role.
After passing these exams, you’ll be officially licensed and able to legally work as a stockbroker.
Are There Different Types of Brokers?
Yes, there are. There are two main types to choose from, but the right decision depends on your specific needs.
These brokers are as barebones as can be; all they do is make trades. You won’t find any financial research or professional advice when using these services.
Since they offer less to their clients, discount brokers are aptly named and also charge less for their services.
This is the type of broker used by most people, since (as previously mentioned) the majority of investors don’t have much knowledge of the stock market.
Full-service brokers offer research and investment advice, which can lead to you making more money in the long run. They also offer more investment options, such as bonds, annuities, and derivatives.
How Do I Choose The Right One?
Like when choosing any other service, there are a few factors you need to look out for. These include:
- Reliability: How do others feel about this particular broker’s services?
- Experience: How long has the broker been in the game, and what are their typical results?
- Accessibility: How’s their personality? If you don’t feel they’re approachable, you won’t get the most out of them.
By doing your due diligence and researching a firm or independent broker before you make your decision, you’ll maximize your chances of financial success.
Still not sure what to look for? Check out what the folks over at tastyworks are doing.
Understanding Broker Trading Can Seem Difficult
But it doesn’t have to be.
With the above information in mind, you’ll be well on your way to getting the most out of broker trading
Want to learn more about the stock market? Make sure to check out the rest of our blog!