Many investors, especially those above 35, feel the need for a branch network and a relationship manager to handhold them. They will be better off opting for a full-service broker. These brokers offer research reports for both fundamental investors and technical traders that customers can turn to for guidance. “Your choice of broker should be dictated by whether it is strong on research and advisory—on stocks, including initial public offers, and mutual funds,” says B. Gopkumar, managing director and chief executive officer, Axis Securities.
Broker frauds are a frequent occurrence in India, hence safety should be a primary consideration while choosing a broker. The quality of the promoter becomes important. Brokerages backed by large private-sector banks score on this count. If you decide to go with an independent broker, go with one that has been around for a long time. “Longevity indicates that the broker has been able to survive the highs and lows of the markets,” says Kalyanaraman. He adds that as regulatory norms get tighter for brokers, many may not be able to survive in the new regime. This makes it all the more important that customers go with established brands.
The National Stock Exchange’s web site has a page (Insert hyperlink: https://bit.ly/30gQxKE) that provides the list of complaints made against brokers. That will give you some idea of how reliable is the broker you plan to go with.
In the past, most frauds have occurred when a broker’s relationship manager took on the role of a money manager, traded on the customer’s behalf, and lost money. “The relationship manager has an incentive to trade more frequently. When he does that, he takes on a higher degree of risk, which results in losses. Stay away from brokers who make such offers,” says Nithin Kamath, founder and CEO, Zerodha, the country's largest stockbroker.
Look for a stable and easy-to-navigate platform
The interface for both the web and the mobile platform should be user-friendly
While every platform will have some downtime, this should not be a regular occurrence
To find out if a broker’s platform is reliable, take feedback from existing users or look for reviews online
Since account opening has become easy, open accounts with three brokers, try them for some time, and then select one
Educational videos, advanced charting tools, and single-view reporting (including a report on capital gains and losses for tax filing) are desirable features