How can we identify a good brokerage house?
Author: Md.Mizrab Alam
Published on: 25/Aug/2022
Selecting an effective brokerage house is a critical process for investors before making a capital market investment. A brokerage house will allow you to open a BO account, which serves as the investor's identification and is used for all investments. A brokerage house is a type of financial security entity that allows investors to open a BO (Beneficiary Owners) Account and gain access to a variety of investment choices, including mutual funds, exchange-traded funds (ETFs), equities, and bonds.
The user must fund their BO account just like any other bank account. To buy stocks, bonds, mutual bonds, exchange-traded funds (ETFs), and other financial assets, they invest from the account balance. Long-term and short-term investments can both be made with it. A brokerage house administers customer orders against client accounts that the firm holds. It also serves as the account's custodian for the securities kept there. A brokerage house or broker acts as an intermediary between the user and the market.
So, in order to ensure the security of our financial assets, we must select a brokerage house that is effective and reliable. How can we now determine which is reliable is the question. We have spoken about a few data that show the reliability of the brokerage house.
Background of the Brokerage House
One of the signs of a brokerage house's reliability is how long the organization has been active in the capital markets. In addition, you can look at the company's reputation, transaction history, history of digitization, range of services, etc. before taking service. The best-fitted brokerage house can be chosen for further examination if it is discovered to have a history of success in the financial industry or to have consistently provided services to its clients without many errors.
The reputation of the Board members
The brokerage house must be run by experts in the share market, people who know about capital market laws more than their employees. Therefore, a client should also look at the organization's reputation for responsibility and its roles in the community before selecting a brokerage house. Their financial standing, default rate, and prior involvement in CSR activity (if any) can all be taken into account in this situation. A successful brokerage house is mostly run by successful share market investors. They know the pros and cons of the capital market and its back draw.
Looks for reliable customer feedback about the brokerage house. It may be both favorable and unfavorable. One client might speak about their current satisfaction with the firm's services on the other hand one might show you the best brokerage house to go to. Brokerage house services may differ from company to company, but always look for digital services and uses experience with their service. At this current stage of the market, the best ones are mostly the digitalized ones.
Fund withdrawal options
With several safety precautions involved, withdrawing money is a difficult process. We must determine whether the brokerage house is capable of offering fund withdrawal services through a variety of platforms, such as a website, an SMS request, a mobile app, etc., and how adaptable these platforms are to be used.
As a digital brokerage house, 01 Limited is offering instant multiple withdrawal services. The user can withdraw money directly to the bank account or to bkash account. These two modes are available in both web applications and mobile apps. Our users can withdraw their profits anytime they want through these available platforms. A full functioning digital brokerage house features build trust between the company and the customers.
Deposit investment options
For the convenience of their clients, a brokerage house may provide a variety of methods for fund deposits like bank-to-bank deposits, cash/cheques, credit/debit cards, and other mobile banking platforms. For a better understanding of the brokerage house’s capacity to offer rapid fund deposit services, it is possible to look at the minimum necessary time and flexibility in each fund deposit platform. The brokerage house should ensure that the users should have the flexibility to invest immediately in the capital market.
Other information that can be taken into account includes-
Recognizing your needs and requirements: The customer must decide what kind of investments they want to make, the level of their financial knowledge, and the type of brokerage house they are seeking before choosing any brokerage house. Compare prices, incentives, the cost of purchasing, selling, and maintaining investments and other securities, as well as service fees.
Investing style: The user's investment style—whether they are a trader or investor—should be taken into consideration while selecting a brokerage house. A trader should search for brokerage houses that charge cheap trading costs since they don't hold their investments and are focused on making quick capital gains from short-term investments. On the other hand, investors who wish to hold their investments should search for companies that offer long-term services that seem promising.
Take into account offers and services: Take into account the discounts and services that the brokerage houses are prepared to provide to their customers. It's crucial to take into account the information's trustworthiness and quality as well as the information's source, including any YouTube videos, social media profiles, podcasts, user forums, or written articles or blogs that the brokerage house uses to educate its clients.
Ease of depositing and withdrawing funds: Depositing funds can be challenging for some brokerage houses. Additionally, it's crucial to have flexibility when transferring funds out of a user's account.
Accessibility of essential data: It is important to take into account whether the customer has access to essential data and information. conveniently accessible transaction information, ledger information, portfolio balances, etc.
A first step in the world of investing is picking a brokerage house. Investors can remove all the unneeded worries from their shoulders and devote their time and energy to activities that will provide more fruitful results by choosing an effective brokerage house.
01 Limited is offering full-function digitalized brokerage house services. We have web-based applications and mobile apps for both android and iOS. As the first online digital brokerage house, we want to ensure our customer's satisfaction in choosing the best brokerage house to enter the capital market.