How to choose a broker in the stock market? 7 criteria
What should a newcomer to the securities market start with? Naturally, with the choice of a broker! How? There are 7 key criteria of choice that a beginner investor should know.
This point is the most important one. Roughly speaking, a broker is an organization to which you give your money. The quality work of the broker is one of the necessary conditions for making money in the stock market. Accordingly, the stock exchange license, which is issued by the Central Bank of Russia, is a sign that the broker works in the legal field and provides services of proper quality.
You can check a broker for a license directly at the Bank of Russia.
First of all, you need to know how long the broker has been on the market. It is best if it is five years or more.
Secondly, pay attention to the , which is indicated by large letters. For example, AAA is the most reliable, AA+ and AA are high reliability, BBB and BB are below average ratings. The more letters A in a broker's rating, the more reliable the broker is.
For a private investor, especially a beginner, it is of paramount importance, because not everyone is ready to pour huge sums into the market "at the start". As a rule, the amount of initial deposits with stock brokers on the Russian market varies from a few thousand to 100 thousand rubles.
All brokers that have a license from the Bank of Russia provide access to Russian stock exchanges, but not all of them provide work with foreign exchanges.
Therefore, if you plan to trade only on the Russian stock market, this point will not matter. If, on the other hand, you are tempted, it is worth finding out whether the broker provides access to the relevant stock exchanges.
Commission is a fee that a broker charges an investor for each transaction made, as well as for depositing and withdrawing funds. Each broker offers an investor a set of tariff plans in which the amount of commission per transaction can vary from 0.1-1%.
It is possible to have special rates when choosing, for example, a certain investment strategy. As a rule, all this is specified in the broker's trading conditions. If there is no such information or you simply cannot find it, do not be embarrassed, because you are giving your money to the company - contact the broker's support directly.
Example of Finam broker tariff plansAs a rule, a broker assigns a minimum monthly fee to clients whose investment strategy involves a minimum number of stock sales and purchases. This is a kind of "salary" for the broker.
Despite the fact that it is about 300 rubles per month, it should not be underestimated. For example, it will be 3,600 rubles per year. Making a small number of transactions and making a minimum profit, it will take about 2,000 rubles per year to "pay" the broker. If the deposit amount is 50 thousand rubles, it will be 4% of the deposit loss every year. That is 4% of your money you will give to the broker.
Since shares are traded electronically rather than in paper form, the broker has a special server that contains information about the investor's ownership of the shares, as well as their purchase and sale.
As a rule, the depository is free at most brokers, but at some brokers you have to pay monthly up to 300 rubles - and that, if you refer to the example above, is another minus 4% from the deposit.
- is a serious and responsible matter. But if you approach the process wisely, using the above criteria, then this start of investment can already be considered a success.