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Choosing the best stock broker can be a chore if you are not aware of what you need to be aware of. This choice really depends on the type of investment you plan to participate in. A broker is a person who can buy and sell stock on the stock exchange and usually is employed by a brokerage firm. If you are thinking of your need for a broker then the simple answer is yes if you plan to engage in buying and selling stocks on the stock exchange. This article will focus on finding the best stock broker for your needs.

To get their license all stock brokers are required to take and pass two tests. Most who have taken the tests will agree that they are pretty difficult to pass. In fact most brokers usually have some exposure to finance or business. Most brokers have at least a bachelors degree with many also having advanced degrees.

Since many people tend to confuse the roles and responsibilities of a stock market analyst and a stock broker I will define them here. A stock market analyst's role is to analyze the stock market and based on that data come up with a prediction of what it won't or will do in a given time frame. A stock broker's role is simply to buy or sell stocks based solely on your instructions.

You should also be aware that in most cases brokers earn their income on commissions from your stock transactions. This commission is generated whenever you participate in a stock buy or sell through your broker. Your broker will typically get a percentage of this fee as well. However, it should be noted that in a lot of cases the broker will charge a flat fee.

Keep in mind that there are more then one type of broker you can interact with. There are two general categories that exist:Full service brokers and discount brokers. The difference is usually in the amount of service you receive and the commission you pay. The Full service brokers will usually have a much larger set of services that they can do for you, in some cases offer investment advice and is usually paid in commissions.

On the other hand you have the discount broker. For the most part they do not offer investment advice or market research. They typically just execute the trades that you have asked for and that's it.

Given this knowledge then the biggest decision you will make when it comes down to choosing the best stock broker is deciding if it will be a discount or full- service one.

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3 comments

SMC Global said... @ August 18, 2010 at 2:36 AM

Thanks for sharing this detail and comprehensive knowledge on Stock Broker. This kind of information are very Important for beginners, like me. Presently I am doing trading with following leading Indian Stock Broker. For more such type of information, Kindly Visit: http://www.smctradeonline.com/

Equity Trading said... @ February 20, 2012 at 1:32 AM

I observe one thing in your article that way of expressing things so good and knowledge about subject perfect but you can know more nifty tips

Jennifer Howard said... @ December 7, 2012 at 4:12 AM

Wow, surprisingly I never knew this.I have been reading your blog a lot over the past few days and it has earned a place in my bookmarks.Thanks for sharing with us.
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