Finding someone you can trust is the most vital component of any relationship, especially one involving money. A stock broker serves as a personal money manager for you. The major role of a stock broker is to provide timely, sound advice on the best investment for you and your money.
A stock broker must be licenced in order to sell stocks. To be certified, a stock broker must be educated and pass state-mandated tests. A stock broker must have a track record of managing stock portfolios in addition to the very minimum criteria.
A knowledgeable investor will look into the records of a potential stock broker for the prior five years. Questions that compel the stock broker candidate to discuss their investment strategy. What stock picks has he made that have made him money? What stock picks turned out to be losers rather than winners? Inquire about the firm’s clients if the stock broker works for a brokerage firm, which most do.
A stock broker is like any other specialist you could hire to help you complete a task. You’re interviewing someone who will put your personal well-being ahead of all other considerations, including stock and investment advice. Have a conversation with a few candidates over the phone. The next step is to make a short list of potential stock brokers and meet with each one in person.
Stock brokers are regulated by each state’s laws and government bodies. You may be entitled to seek damages through arbitration if your stock broker acted irresponsibly in the handling of your account. These are important safeguards to take. You should pick someone who will never put you in a predicament like that.
When selecting a stock broker, keep the following factors in mind:
– A friend’s recommendation for a stock broker is useful, but it isn’t the final word.
– If there is a disagreement, hiring a stock broker pal can be challenging.
– From the initial contact, does the stock broker return calls and behave attentively?
– Does the potential stock broker question about your investment comfort level?
– Is the potential stock broker willing to tell you about his or her investment strategy?
– Does the candidate stock broker’s investment philosophy align with your own?
– Inquire with the stock broker candidate about limit orders and other measures to protect your money.
Is the stock broker who is applying upfront and honest about his or her in-house stock portfolios? Stock baskets are sold by many brokerage firms under their own names. What has been the performance of the company’s stock portfolio over the last four quarters?
When the candidate stock broker speaks to you, do you get the impression that he or she is trying to sell you something? Although every stock broker is a salesperson, there are several constraints to this job.
Finally, making a decision on the spur of the moment is never a good idea. Go home or back to your office after your face-to-face meeting to consider your alternatives. Pay close attention to your gut reaction after you’ve left the meeting. Is this someone you can trust to carry out your plans and make sound investment choices?
