Stock Broker

When you decide to buy or sell stocks, the first step to take is to choose a reliable broker or sub broker who will carry out your transactions in a satisfactory manner. You can obtain a list of brokers and sub brokers from the stock exchanges or from their websites. You can go through these lists and tick mark the brokers/ sub brokers that, at first sight, appear to interest you.

A good broker will make it easier and more profitable for you to transact business on the stock exchange, Therefore it is important for you to put in the time and effort required in verifying the background of the broker or sub broker with whom you intend to deal. It would be worthwhile to examine his track record, financial standing, and his local reputation in providing efficient services to his clients. Your more experienced and knowledgeable friends, business associates and other acquaintances are also a reliable source of information that you can tap for selecting a suitable broker or sub broker.

Most investors are under the erroneous impression that their broker's job is to provide advice and tips on what to buy and sell. This could not be farther from the truth. There is a strong possibility that any advice coming from a broker could be biased and short sighted. A broker's job is to execute your transaction for a fee and to provide you with a necessary documentation. Typically, he neither has the time, temperament nor the ability to give high quality, research based advice, Therefore do not be misled by brokers who promise to give you advice, insider information and timely tips.

Another important factor to consider is whether your broker or sub broker encourages you to frequently churn your portfolio. Such brokers and sub brokers are best avoided as their primary motivation is to increase their brokerage incomes through higher turnover of orders rather than looking after their client's interests.

A last bit of advice: deal only with a SEBI registered broker or sub broker after making wide ranging inquiries regarding his dealings with other clients and the quality and cost of the services that he provides.

How do you find out whether your stockbroker is reliable and sound? The only way to do so would be by actually dealing with him over a period of time. It is only through personal experience that you will really be able to assess what he is like.