How to choose the best brokerage firm for you

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If you want to invest money, you need to open a brokerage account. But with so many different brokers, how do you pick the right one?

Your decision will affect many aspects of your life as an investor, from the cost of your investments to the assets you can buy and sell. To make sure you’re making the right decision and being happy with your broker for the long haul, follow these four important steps.

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1. Decide on the type of account you want to open

You may want to open a standard taxable brokerage account, a custody account for your children, a 529 plan to help save for college, or one of the many types of retirement accounts such as a traditional IRA, a Roth IRA or a solo-401. (k).

Not all brokerage firms offer all types of accounts, so think about your plans to make sure you find a broker who will meet your financial needs.

2. Determine your investment priorities

Different brokerage firms have different strengths. Some brokers are best suited for people who want to trade but don’t have a lot of money, while others are for investors with higher net worth. Some focus on full desktop trading platforms for experienced traders, and others are designed for mobile users who want quick and easy trading. Some are no-frills and charge little or no fees, while others may cost more or have higher minimum accounts but offer better customer support.

Think about what kind of experience you want to have and what is most important to you in order to find a brokerage firm that is right for you.

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There is also a big difference in the types of assets that different brokerage firms focus on. For example, some offer a huge selection of cheap ETFs and no-load mutual funds, while others allow cryptocurrency trading, which most traditional brokers still do not offer. You will need to think about what types of assets you hope to trade and look for a brokerage firm that will give you access to all of them.

If you are a newbie investor, you may have different client education and business support needs. You might want to access plenty of webinars and educational articles that teach the basics of investing, and you might be interested in filters that make it easier to select different assets to buy.

If you’re a more advanced investor, on the other hand, you’re probably more interested in the charting features, expert analysis, and in-depth company research that you can access.

Think about where you are starting from and how much time you plan to spend researching investments so that you can find a brokerage that offers the tools and materials you are looking for.

4. Explore the trading platforms of different brokerage firms

Finally, you want to make sure that you are comfortable browsing the brokerage firm’s trading platform to buy and sell assets.

Most brokers will allow you to download their apps or try out their desktop software without transferring money to the account. Consider spending time playing with the platforms that each broker you are interested in offers before making your final choice.

By following these four steps, you should hopefully end up with a brokerage firm that makes investing easy and gives you access to the type of account and assets you are looking for.

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