How to choose the right stock broker

Choosing a broker is one of the foremost requirements for investing in a stock market. A broker is an individual/ organization who are registered members of stock exchange. They act as an agent and have license to buy and sell shares on behalf of people. Selecting the right broker can be quite challenging, especially for a novice investor as not all brokers are right for all investors.

Here are few tips on how to select the right broker that offers fully integrated brokerage services in India.

•  Credentials of broker: Reputation of a broker is very important. Check if there are any complaints against the broker on SEBI online portal. If possible also seek for opinion frompeople who have dealt with the broker.

•  Brokerage: Generally people select broker on the basis of commission on trade. That should   not be a criteria on how a broker is to be selected. A broker should be aware of likes, dislikes, risk profile and favored asset class of an individual so that they can give personalized tips.

•   Range of trading segments: There are different financial products (Equities, commodities,      mutual funds, etc.) that people like to trade/invest. Select the prefer red trading product and see  what different stock brokers can offer.

•  Broker for Institutional clients: For Institutional clients, the ideal broker is the one who can support high trading frequency. Apart from discounts and fee, broker’s trading platform, analysis tool and data offerings are also the important factors to be considered. NSE also offers collocation facility for high frequency traders which allow them to place their computers close to NSE exchange’s system and save trading time. However, NSE colocation facility can be used only for DMA and ALGO trading on NSE. In order to provide this facility to a large number of traders, NSE rents out full rack as well as half rack of computer space.