Investing in the stock market is one of the best ways to grow your money passively and build financial security.
And if you’re ready to invest in the stock market, then there is one thing you absolutely need: a brokerage account.
A brokerage account is an account you can use to purchase and hold investments, such as stocks, bonds, exchange traded funds (ETFs), and mutual funds.
When you open a brokerage account with a brokerage firm, the firm buys and sells investing assets in the market on your behalf.
But maybe you’re getting hung up on trying to decide which brokerage firm to go with. Well, look no further.
Today, I’m going to help you find the perfect brokerage for you so that you can open an account with confidence. I’m going to give you 6 things to consider when looking at brokers and if you stick around until the end, I’ll be sharing the best brokerages of 2024.
How to find the right brokerage firm for you
Finding a good brokerage firm is essential for successful investing. Here are some tips find the best broker for you:
1) Identify your needs
To determine the right brokerage for you, ask yourself what type of investments you want to make - do you plan to invest in individual stocks or would you rather have the option to invest in funds? Are you a beginner, more advanced, or somewhere in the middle? Do you plan to buy and hold your investments or trade frequently?
Your answers to those questions will help you choose the right brokerage for you.
2) Check regulatory compliance
Ensure that the broker is registered with the appropriate regulatory bodies in your country. In the United States, for example, brokers should be registered with the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).
3) Compare fees and commissions
When you’re choosing a broker, there are 3 common fees to be aware of:
- Trading fees (aka commission fees): Trading fees refer to the costs incurred when buying or selling securities such as stocks, bonds, options, or mutual funds on a brokerage platform or through a financial institution. Not all financial institutions will charge you trading fees, so pay close attention to your brokerage’s fee structure to determine whether or not this type of fee will apply.
- Sales charge (or load) fees: Like a trading fee, this is charged when an investor buys (front-end load) or redeems (back-end load) shares in a mutual fund. These fees reduce the amount of money initially invested or received upon redemption, impacting overall investment returns.
- Transfer fees: This fee is incurred if you decide to transfer your investment account funds or initiate a wire transfer. This fee can range from $0 to $100.
Different brokers may or may not charge these fees, so look them up before you choose.
4) Evaluate trading platforms
Check out the broker's trading platform to see if it meets your needs. If you research potential brokers on YouTube, you can find videos of people exploring the features of different platforms. Make sure it's user-friendly and provides the tools and research you require for your investment strategy.
5) Consider customer service
Good customer service is important, especially if you're new to investing. Look for brokers that offer responsive customer support via phone, email, or live chat.
6) Check for additional products & services
Some brokers offer additional products such as savings accounts or retirement accounts, or services like financial planning, investment advising, or robo-advising. Ask yourself if any of those things are important for you and if so, look for brokerage firms that offer them.
.png)
Best brokerages of 2024
Charles Schwab
Schwab is a good option for investors who need a full-service broker that performs strongly across the board. They have an efficient, easy-to-use mobile app, four free trading platforms, a wide selection of no-transaction-fee mutual funds, and $0 commissions for stocks, ETFs and options.
A benefit of Schwab is that they also offer a bank, so if you’re opting for simplicity and want to keep your savings and your investments in one place, this is a good option for that.
Robinhood
Robinhood markets itself as being a beginner-friendly investing option. It’s a simple app for getting started, but if you plan to invest in index funds, mutual funds, or individual bonds, you can’t do that through Robinhood.
E*TRADE
E*TRADE is a solid brokerage option, regardless of what type of investor you are — passive or active, novice or expert. It also provides thorough educational resources and analysis tools.
E*TRADE offers several trading platforms that fit well with investors of all levels of experience. The E*TRADE Web platform is ideal for beginners, while more active traders can use the Power E*TRADE platform.
Fidelity
Fidelity is a one-stop financial shop for investors. It’s best for casual investors and traders who want access to more tools, charting, and technical analysis, and it’s consistently voted the best overall brokerage choice. I would also add that Fidelity has one of the easiest user interfaces - it makes the process of buying a stock or a fund much more intuitive than some of the other online brokerages.
Vanguard
Vanguard is a low-cost, long-standing brokerage that is best for long-term investing. If you plan to opt for the set-it and forget-it approach, Vanguard has some of the best-performing, lowest-cost funds.
Also, if you ever decide you don’t want to manage your investments on your own, you can opt in to Vanguard Personal Advisory Services for a reasonable fee and have your assets managed for you.
The most important thing...
So which brokerage should you use?
At the end of the day, the most important thing is to just get started. Don’t let this decision slow you down. You really can’t go wrong, so just choose one, open a brokerage account and get your money to start working for you.
Time is your most valuable asset when it comes to investing, and you don’t want to waste it by being indecisive.
Like I said before, if you want to learn the secrets of successful investing, be sure to check out our free masterclass.
A Weekly Sip of Our Best Advice
We respect your privacy. We'll use your info to send only what matters to you — content, products, opportunities. Unsubscribe anytime. See our Privacy Policy for details.
