Generally speaking, finding a suitable broker will be determined by your investment needs, but you should consider the following:
- Quality of information. Although execution only brokers may be informed about many shares, they are not licenced to offer advice. However, most of them will compliment their services with a range of tools and information points such as websites to help you monitor and manage your investments.
- Speed of execution. Even though you may lodge instructions with your broker by phone and internet etc, you must bear in mind that it takes time for the broker to execute your instructions. He has a legal obligation to 'settled' within 3 days, which is known as T+3, but many will offer faster services.
- Markets available. Some brokers will operate on one Stock Exchange, others will operate on a number of exchanges. Clearly, this has direct implications for you, the investor.
- Cost. As with all financial services, the rates charged can vairy greatly. The cost of brokers services should be compared in light of the three criterial listed above.
- Tools. The availability of online monitoring and presentation tools is a must for the serious investor. Many brokers provide such tools. However, the quality of these tools is instrumantal in their value.