By now you’ve probably learned more about the wonderful world of commission pricing than you’d ever really wanted to know. As you’ve perhaps figured out, choosing a discount brokerage can be a bit of a chore, but it can be made much easier by understanding what your trading needs are before you go shopping. Understanding how much you have to trade with, how often you expect to trade, what types of order sizes you expect to make and what price of stocks/ETFs you want to buy will go a long way in making the decision of which broker fits your needs a lot easier. There is, however, more to choosing a broker than just commission pricing. Other than commission pricing, some of the other important factors that go into choosing a discount brokerage can be clustered into the following 3 categories:
- Platforms & Trade Execution
- Account Management & Customer Service
- Research Tools & Education
Your experience level and investing/trading needs are generally a good way to establish which additional features you will need to pay attention to most when selecting a discount brokerage firm. For example, an experienced investor will likely have a sense of how often they place orders, what types of orders they make and the sizes of those transactions.
On the other hand, for those who are just starting out, it is much harder to understand what their needs and requirements will be. It is difficult for those who are new to the market to know what the right questions to ask are and even to know how to make heads or tails of the different products and services that are offered as part of opening a brokerage account.
In our continuing series on how to choose an online discount brokerage company, we will be looking into each of these additional categories to help beginners and experienced investors/traders alike make sense of their options.