7 Key Things the Stockbroker Can do for You

If you are serious about investing in the stock market, I can bet that sometime soon, you're going to need a stockbroker. In fact, unless you restrict yourself to primary offers and never bother selling any stock, it won't be long before you'll have to use one. A broker, in any situation, is a middleman, helping parties get transactions executed. That is also true in the stock market, where the stockbrokers get intending buyers and sellers of stocks to transact their business, interestingly, without really getting to meet or know each other. They are licensed for their important role by the Securities and Exchange Commission (SEC), which also regulates their operation. In this context, infringement of rules of the market, including abuses of customers' accounts or transactions, do get appropriately sanctioned. So, never be afraid - you only need to know the rules so as to know when your rights are violated by a stockbroker (read more on dealing with abuses by your stockbroker).

As they are the ones licensed to trade on the floor of the stock exchange where stocks are bought and sold, it leaves the rest of the people - the investing public - no choice but to work through stockbrokers. Given that scenario, it is one of the measures you will have to take - to find a stockbroker or a few of them, that you will be using for your transactions. For what to look for when selecting, read this article. What can you expect the broker to do for you? Some or all some of the following, depending on what you require:

• Take and Execute Your Orders
  Your transaction orders will be either to buy or to sell. This is the most critical reason you need a broker, given that your transactions have to be executed by one. Placing an order with a stockbroker is a painless process, the most difficult part being to provide the funding for your purchase, if a buy order. There are no complicated forms to complete - a share transfer form, required whether buying or selling, is an easy-to-complete document and the broker will guide you where you need help. The stockbroker has SEC-approved fees for this service and will not dare to charge more. On the contrary, if you have purchasing power (significant volumes, if you understand me), you can negotiate for a reduction. Current rates are shown here, straight from SEC.
• Investment Advisory
  Personally running your investing machinery is possible for you, but there are benefits to using expert advice and support. Every trade has some 'trade-secrets' which only insiders can be on top of. And there are core-insiders too. If you are close to your broker, you may tap a lot of helpful information and advice. Besides, you can ask questions and learn. Using a paid advisory service is not an absolute necessity, but a knowledgeable player backing you can amplify the success you achieve. There are licensed investment advisors, but brokers also have a lot of practical experience you can use. If a broker is to additionally advice you in a formal relationship, he is sure to charge for that service, but that cost can easily be recouped from the outcome of just one good investment advice. Nothing guarantees that you will get 'perfect advice' all the time but, if your stockbroker is good, the value of his advice will soon shine out.
• Fund Management Services
  You don't want to hassle yourself with stock analysis, market tracking and all those chores that are the basis of stock investing success? There is the option of getting a broker to manage a fund for you. You provide the fund, he takes all management decisions and runs the account. That will be a special service and they usually split the earnings with you, in a pre-agreed ratio. It's your money, so the lion's share should come to you. To protect yourself, it's best to have a guaranteed minimum return which the broker should earn on the investment (that conditionality will cost you a little more, but puts the burden of a loss on him).
• Stock Verifications
  When you want to sell your stocks, or simply want to dematerialise (dispense with share certificates by getting into the CSCS depository), your stockbroker will handle the processing. The certificate, with your signed share transfer form, will need to go to the company registrar, for verification. It simply requires forwarding your certificate to the broker, completing the simple share transfer form and giving the instruction you want. The broker will do the rest. Some stockbrokers charge a little administrative fee for processing this, while some don't.
• Other Registrar Runs
  Getting things sorted with share registrars is never an easy process, though things are improving with many of them getting all or parts of their transactions automated. If you've lost a chare certificate and need a replacement, this could prove tedious, requiring several visits to the registrar. Your stockbroker goes there all the time to process various transactions (they usually have somebody doing the runs). Your best option is to let them handle it - you sign required documents and they forward and track the replacement, which usually takes some time. They can also help process a revalidation of expired dividend warrant for you at the registrar's.
• Transaction Records
  As a serious investor, you would be expected to keep a record of your transactions. But just in case you don't or there is a slip somewhere, your broker also has an account for you which has your transaction details. If you have need for your records and there is a missing link, try your broker out for a statement of your account. That should be a mirror of the one you should keep.
• Market tips and Alerts, Investment Education
  These can be very valuable in what you are doing and the stockbroker can be very helpful here. It's not his duty to provide you information or to arrange investment lessons for you, but if you show interest, I'm sure a broker that values your patronage will do everything possible to support you. You can learn, over time, by interacting with your broker and asking questions when you need clarification on investing, stock transactions or other related issues. By virtue of their position, they can also gain access to information that can mean profitable opportunities for you. Being close means you can gain access to some of that information too.

Operating in the stock market definitely requires the services of a stockbroker because you need them to trade. There are ancillary services and benefits too. So, just take some time to select a stockbroker, if you haven't. Again, this article can be of help in choosing a stockbroker you will be happy with.

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