The stock market is a complex entity that constitutes the functioning of various bodies or agents so traders can engage in trading activities. These agents include a regulatory body, stock exchanges, depositories, and financial brokerages. This article focuses on the Financial brokerages or stockbrokers that make up an essential part of the financial markets.
Role of a Stockbroker
A stockbroker is an intermediary connecting an investor to the stock markets through their services. They provide Demat account and trading account services to investors. Investors require a Demat account since this account serves as a digital safe to store their shares. At the same time, trading accounts are also vital for buying and selling transactions. So, without a Demat account and a trading account, a retail investor cannot invest or trade shares, ETFs (exchange traded funds), and derivatives.
Besides the provision of Demat accounts and trading accounts, a financial broker may also provide several other services like stock advisory services. Hence a stockbroker plays a critical role in facilitating trading activities. People who wish to invest in the stock market approach them to open a Demat account and trading account.
Finding a Trustworthy Broker
The Indian stock market is still relatively young and shows tremendous growth compared to the stock markets of developed economies like the United States. As the Indian stock markets continue to boom, the numbers of investors also increase, and so does the number of brokerages. The increasing number of stockbrokers has helped introduce more people to investing in the stock markets. At the same time, they have also provided employment opportunities to many Indians. However, with the number of brokers increasing, it has become challenging to identify trustworthy brokers. Here are some tips to jot down to find a reliable broker.
1. SEBI Registration
Before associating yourself with the broker and seeking any of their services, ensure that they have the approval of the market regulator to provide broking services. It is the most fundamental step to knowing the trustworthiness of any broker. SEBI, also called the Securities and Exchange Board of India, is the regulatory body of the securities market. Hence, only brokers registered with SEBI are eligible to provide brokerage services. Having SEBI’s licenses means the broker has cleared several audits and meets the minimum requirements to provide services. Hence, a SEBI licensed broker is unlikely to get involved in any dubious activities. If the broker does not meet this condition, cross the broker from your list.
2. Research The Broker
One can also do basic research on the broker to learn about their reputation. The internet is a powerful tool at your disposal to help uncover both general information as well as past information. Find out for how long the brokerage firm has been providing its services. Dig in to see whether the brokerage firm has a clean history of doing business and providing services. You can even consider reading reviews published online by independent outlets and individuals. If you know people from the industry, consider speaking to them to learn about the broker’s credibility.
3. Speak to The Broker
The last thing you can do is connect with the brokerage firm itself and ask your queries to the concerned staff. You can do this by either visiting one of the broker’s offices, sending an email, or giving a ring on the number provided on their website. From the interactions, you may be able to gauge if they are the right broker for you. Try learning about all the different services they offer, how they get paid, and how they can benefit you.
The above mentioned can help you find a broker you can trust, whether you are seeking Demat and trading account services or intend to partner with them.
Partnering with a Broker
If you possess expertise in the financial segments, are well-versed with the share markets, and have a client base, you can partner with a SEBI registered financial broker like IIFL Securities. You partner with the broker and work as a financial advisor or a sub-broker. A sub-broker is an intermediary between the primary brokerage and its clients. A sub-broker can build a more personal relationship with the client and cater to their requirements better.
To become a partner, you can visit the broker’s website to register, for which you have to share a few details and submit a few essential documents. As a partner, you will receive the broker’s assistance, shareable content and technology platforms to help you with your work.