The Role Of A Stockbroker (2)

While we generally know the stockbroker (or brokerage firm in the case of a firm), as the one that helps you purchase or sell stocks, there are many more roles they take and they can offer assistance to the investor beyond trade

In our last post, we spoke about who a stockbroker is and why you need the person. While we generally know the stockbroker (or brokerage firm in the case of a firm), as the one that helps you purchase or sell stocks, there are many more roles they take and they can offer assistance to the investor beyond trade.

In this post, we review some more roles the stockbroker plays and how these roles can be beneficial for you.

Administrative Processing

There is more to buying and selling shares. While on the surface you can simply put up a call to your broker and he or she makes the purchase or sale as you want, there are certain backend aspects to it you probably don’t know about. This is the processing aspect.

For example, in order to sell your stocks, you need to send your share transfer form together with your share certificate to the registrar of the company whose stocks you want to dispose. Getting things in place with share registrars can be a very frustrating process.

Where you need to process a revalidation of an expired dividend warrant with the registrar of a company, a stockbroker saves you time and stress. How about the situations where you have lost your share certificate and need a replacement?

It could require multiple visits to the registrar of the company to get things sorted out. Imagine if there are many companies to be taken care of? Your stockbroker will certainly come in handy.

Even the required processing with the CSCS is carried out by your stockbroker. While some brokers might charge administrative fees for extra roles like stock verification, they’ll take a load of stress from you.

Portfolio Management

Just the same way we have professional fund managers, many stockbrokers also offer the same service. As opposed worrying about stock analysis, market analysis and so on, a stockbroker can also help you make better investment decisions by helping you manage it.

The idea is that the broker takes away your need to make strategies or manage your portfolio. In terms of payment, this will require a commission as paying a fixed rate might cause your broker to be negligent or lackadaisical about the investment decisions to be made.

This commission is usually little and you still make most of your money from the investment process.

Market Information

Finally, a stockbroker can be a very good source of market information, tips, alert and relevant education. If you have a stockbroker that values your patronage, he or she will be willing to put things in place that will facilitate your investment success and the first way they do so is by providing you with relevant market tools and information.

Where you have questions, concerns, and worries, a phone call with your stockbroker can be all you need. More so, as a result of their position, they know about opportunities you can leverage.

That said, all these roles are only valid when you have a good stockbroker. As such, take out time to find a good one or a good firm and it will make all the difference to your investment process.

Written by Lawretta Egba.