So you're ready to buy shares. And you've read our introductory article. But you want more information on how to choose a stockbroker.
Unless you really value the research that a full-service stockbroker provides, you're likely best served by signing up with a discount online broker. And while we can't tell you which stockbroker will be best for you, here's a five-step checklist to help you decide
1. Which markets does the broker offer?
Are you only planning on buying ASX-traded shares like BHP (ASX:BHP), Telstra (ASX:TLS) or Woolworths (ASX:WOW)?
Or would you like to buy US companies like Amazon.com (NASDAQ:AMZN), Apple (NASDAQ:AAPL) or Facebook (NASDAQ:FB)?
Perhaps you want access to the UK, European and Asian markets, too?
The answer to this question will help you decide if you want one broker that can do it all, or you're happy to have perhaps one ASX broker and one for US markets.
2. How user-friendly is the website?
Buying shares needn't be complicated, but it can be a little daunting the first time. Does it have a comprehensive and easily accessible 'Help' section. Tutorials? Do the menus look relatively simple?
3. How accessible is customer service?
Even the most tech-savvy of us have questions. Maybe about the website. Perhaps about how the trade process works. Or you just want to know it's easy to get in touch if you need something. It's easy to overlook, but when things get tough, it's nice to know there's someone to talk to if you need it.
4. Are there linked bank accounts?
There's no need to have a bank account set up through your broker. Indeed, there are likely better accounts elsewhere. But linked accounts can have two benefits. First, it's just simple. You want to have a separate investment account to make regular savings and to have your dividends kept separate. And second, some brokers will give you discounted brokerage if you use their linked account.
5. How much does it cost?
I saved this until last for a very good reason: it's rarely the most important, and usually the least important part of your decision. In the context of all of the above, the long-term Foolish investor will likely be saving a very small amount of money by chasing the very cheapest price — and potentially passing up features that are more useful and more important.
Whether you're paying $15, $20 or $25 per trade just won't matter if you're only trading a couple of handfuls of time each year. So don't pay more than you need to — but don't confuse price and value… which is also worth remembering when it comes to choosing shares, too.
