When building an investment portfolio, it’s important to work with people who understand your goals and can support you in achieving them. Whilst some investors can successfully navigate the financial market alone, this takes a lot of skill and can lead to significant losses, so many choose to work with an experienced broker who can act as an intermediary between the investor and the markets they’re investing in. Some brokerage firms have the skills and market knowledge to offer advice and support and can help guide you through the challenges and pitfalls of investing to get you the returns you need.
There are so many different options out there to suit different investors, so make sure you select the option that’s right for you by following the below tips.
Work Out How Much Support You Need
Traditional brokers have the industry knowledge and expertise to guide you through the markets you want to invest in, but if you want to pay lower fees and make more decisions yourself then consider working with an online, or discount broker. These firms offer the same opportunity to purchase assets but do not provide the analysis or assistance of a traditional, full-service broker. Think carefully about the support you need and whether it is worth paying higher fees to enjoy more support, or if you have the knowledge to make your own choices and simply need a broker to access the markets you want to invest in.
Decide What Kind Of Service You Want
When considering how much support you will need, you also need to think about how you wish to communicate with your broker. If you’re happy to use an online platform then a discount broker might be perfect for you, but if you wish to speak to your broker over the phone or meet them in person to discuss investment strategy then you need to make sure that you work with a broker that will be available to you. You might want to consider where they’re based if you want to physically meet with or speak to your broker, as differing time zones and long travel times could lead to increased fees or a lack of opportunity to properly communicate.
Consider Choosing Multiple Brokers
Some brokers can support you in buying assets across a variety of classes and markets, whilst others specialise in providing specific investment services. If you have an expansive, diversified portfolio then consider working with several brokers who have specific experience that a more general broker is unable to provide. Finding a good specialist broker can be difficult; so, if you are looking to invest in a specific market, such as Forex, then using a comparison platform like FX Scouts to find a specialist Forex broker is an essential starting point. By working with a range of brokers you can further spread your risk, as should one strategy turn out to be unsuccessful you will have a number in play, meaning that you could still succeed in a different market using a different broker.
Think About Your Investment Style
Your investment style will determine which broker is best for you. You might be keen to trade on your assets quickly and achieve returns as soon as possible, or you might be looking to buy and hold your assets for significant periods of time so that you can achieve long-term results. There are benefits and challenges to every type of investing, and if you don’t know how you want to approach your investment process then work with an investment advisor to find the perfect approach to suit your needs and wants. Whatever approach that you choose to take, make sure that you find a broker that can support you and provide the service you desire.
Understand The Fees Before You Commit
Brokers charge fees for their services, as well as additional premiums depending on their business model. Learn about the different types of broker fees you might encounter, and then communicate with a range of brokers to find out how their fee structure works. Make sure that you are fully aware of how much you will be charged before you agree to work with a broker, as many charge withdrawal fees and this could mean that you end up paying a significant amount of money even if you do not achieve a strong return. Some brokers offer discounts for those that buy and hold multiple assets with them, but when initially working with a new broker always be careful and only invest a little money until you trust them and feel comfortable with their investment style. Once you know that they’re the broker for you, invest a larger proportion of your portfolio as this will help you to save money on your broker fees.