To trade online you need to select a broker who can execute trades and manage your account for you. Brokers offer a variety of account types and services so it is best to research which broker is the right fit for you dependant on your investing goals, educational needs and experience. Here we will take you through all the things you need to select the right broker for you. We even include an easy to use comparison table!
Choosing the best online stock broker can make the difference from an easy and exciting new experience trading to a constant frustration and disappointment. Accessing financial markets through online brokers is easy and inexpensive but there are so many out there tailored to a different sort of customer, how could you ever choose? With our help choose the right broker to optimise your user experience AND profits.
What do you need?
Take some time to think what is most important to you when trading and be frank with yourself about your experience level and how much education and support you will need throughout your trading journey. If you’re a beginner, look for low fees and easy access to support, including tutorials and training videos on broker platforms. Whereas, if you are experienced, check what advanced features the broker provides, including data analysis tools and professional investment resources.
Consider the following things to help judge your personal needs:
- Are you an active or passive investor?
- Do you want to be hands on, adjusting your portfolio with loads of trades each day or do you want to hold some long-term positions with little day-to-day activity?
- What type of investments do you want to trade?
- Different platforms are suited to different types of trading better than others. Will you trade stocks, mutual funds, ETFS? Or if you’re more experienced, are you interested in options trading, futures trading or fixed-income securities? For an experienced trader, getting the right broker means you may mean you will need to pay a little more but it’ll be worth it in the long run!
- How much help do you need?
- Do you want to plan and trade yourself, learning how to interpret charts and data? Or would you prefer to hire an expert who can manage your portfolio for you? Do you need plenty of access to support services or do you already know what you’re doing?
- What are your investment goals?
- Are you intending to supplement your regular income or make trading your day job? Are you trading to spend now or saving for retirement or children?
What makes a good broker?
Check these last things before committing to a broker!
A good stock broker in the UK is regulated by financial bodies such as The Financial Conduct Authority (FCA) to protect consumers and keep the industry in check. Look out for regulating authorities to ensure your broker is safe and fair to use.
Check what security measures your broker puts in place to ensure you and your data are being protected such as two-factor authentication, cookies and third party rules.
The broker should be able to provide the right services for you whilst suiting your budget. A small premium is justifiable if the platform offers features you need. So look at the costs of different account activities to judge which broker works best for you.
- Opening account fee
- Deposit minimum
- Account maintenance fees – monthly/annual
- Included access to trading platform
- Trading commissions
- Advisory services
A great feature most brokers provide is running a demo mode so you can test out the platform before you commit or upgrade to a premium service. So give a few brokers a test drive, test the usability and any special features before you commit!
Now you know how to choose the best broker for you, what brokers are out there?