How To Open a Brokerage Account in Three Easy Steps
3 Steps to Opening a Brokerage Account
Opening a Brokerage account isn't difficult, and following these easy steps you will be right on your way.
First, you will want to decide if you would like a full service broker or a discount broker.
Full Service Brokers usually require that a sales person open your account. They will also help you in the selections of your stocks and answer your questions and give advice as needed. That same person will receive some commission from you as you buy and sell stocks. The commission is usually larger than what you would pay with a discount brokerage firm. This is one of the reasons you want to thin carefully about full service brokers. The down side is that while most are probably very nice and honest people, some may apply pressure to you, just so they make a commission. Unfortunately there can be a conflict of interest with a full service brokerage firm. The more they encourage you to sell and buy, the better they will do financially.
I am not by any means saying that they would do this, but it is something to consider for sure, and you will want to at the very least ask around for good advice from people you really trust first if you decide to go that route. Watch out for things like being encouraged to buy load mutual funds over no load. They make more money with load mutual funds.
A good tip is to learn how they will be compensated, ask questions. Find out if their advice is worth the price you are paying.
Discount Brokerage Companies will allow you to open an account and be the one fully in charge of that account. Its nice to be able to make all the decisions with this kind of account. Since you aren't paying anyone to to manage your account, the commissions will be lower. It may be worth looking around for some good, well known discount brokers.
The second thing you will want to do with opening a brokerage account, is to find out what the minimum required deposit is. Some brokerage firms will let you open an account with smaller amounts of money. Some even let you open one with as low as five hundred dollars. Some of the better known discount brokers have their minimums ranging from about 2000 dollars to 10,000 dollars.
The third thing is to visit the brokerage firm office' or contact them in some manner. Whether by calling a toll free number, or looking at their websites online, find out more about the brokerage firms that look interesting to you. Sometimes the best ones aren't necessarily local.
By following these easy steps, you are on your way to opening a brokerage account.
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