Stock Broker Cost

How much does a stock broker cost?

Whereas dealing in stocks and shares was once a routine only for the very wealthy the latter years have seen an influx of normal everyday people indulging in the practice and often to great effect. Making a profit is a great aspect of stocks – you can, of course, also lose – that is attractive to many people, yet the fact remains that you will need a Stock Broker to deal in stocks and shares, as these are the people with not just the know-how but the access to the right channels. Choosing a Stock Broker can be a difficult decision, and costs will vary not only due to location but thanks to the size and nature of the transactions you undertake.

General Cost

• Bear in mind that many brokers have two possible stringent requirements – you must invest a minimum amount in a given time, usually over a year, or you must carry out a minimum number of transactions in that time. Some brokers insist on both, and the rules vary greatly between brokers.
• If you do not pay a minimum fee or agree to a minimum transaction count then you may be subject to annual maintenance charges of between $150 and $500. Many firms do not charge either this or apply minimum levels, and these are clearly the ones to go for.
• You will pay a standard charge per transaction – often a percentage but sometimes a set cost – and this will vary greatly between brokers.
• You will pay commission to the broker, too, depending on the size of the transaction and the type.
• Many brokers may take a percentage as a cover cost – check these in the small print.

Extra Cost

• There should not be any added costs in addition to those listed – charges and standard fees – so check with your broker beforehand to make sure you understand what it is all about.
• For beginners there are plenty of books on the subject – look to spend $30 at least on a good one – and there is much information on the internet, too.

Tips

• Make sure you understand the nature of the business, and don’t go into the business of stocks unawares.
• Check out websites such as Newsday.com and The Motley Fool for useful information on the art of trading in stocks and shares.

Shopping

• Check out a number of different brokers for their agreed rates and commission
• Visit biz.yahoo.com/edu/cb/ir_cb4.ir.html for information and advice on brokers.
• Check the many websites dealing with such services for customer feedback.
• Check the Better Business Bureau for recommended providers.

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