Why a broker is helpful to new investors

Posted: 29th March 2019 08:09

Investing is often heralded as a magic money tree – a simple thing that anyone can do to turn £10 into £1m. That is not the case though. If you are a beginner, then there is a possibility that you might get lucky and make a lot of money. However, there is equally a possibility that you will be unlucky and make a loss. Help can be provided by brokers, but what exactly can brokers offer to you that will make your investments more likely to succeed?
Brokers will have years of experience working within financial markets. This means that they will be able to give you advice that should help to provide both a long-term and short-term plan with your investments. In addition to this, a lot of brokerage firms will be dedicated to providing the best customer service possible. This means that they will be trying to provide the best-quality advice to their clients as possible. While no advice for how to trade is fool-proof, it is important to remember that it is in your broker’s best interests for you to make money. If you make money, then they make money.
Their experience also means that they are able to analyse the data related to financial markets to a much higher level than you. This means that brokers are able to look at various market trends using analytical tools and read the data in a meaningful way. This is not the kind of thing that you can pick up overnight. The investment tips that your broker gives you will be put together through years of experience, which adds weight to your broker’s opinion.
Access to different markets
One of the main things that using a broker can offer you is direct access to different markets – markets that you may not have had direct access to normally. If you want to be able to trade on foreign markets directly, then it is important to find a broker that is able to offer you this service. Checking out a site such as will point you in the direction of a broker that offers this service.
The ability to invest on an international level means that you will be able to have access to a much wider range of stocks and shares than normal. This allows for you to invest in more low-risk stocks or more high-risk stocks depending on your strategy. Without a broker, this would be a difficult task to undertake, and as such, it shows just how important a broker is to beginner traders.
Access to different products
These days, the majority of brokers will offer more investment products than just stocks and shares. If you choose a broker with a wide range of products on offer, then you will be able to create a much more diverse investment portfolio. This ensures that you will have a more well-balanced portfolio that will be more resistant to trends in the market.
Brokers that offer a range of products will also be able to offer you bank account products. It could be vital in the long run if you are able to link your bank account and your investment account. It will allow for smoother transfers of funds, possibly better deals on commission, and lower transfer fees. A broker that does all of this will mean that you will not have to make numerous trips to different financial institutions in order to get your investments in order.
Different types of broker
Depending on how you intend to trade, the type of broker that you choose will make a big difference. A broker that matches up to your preferred trading style will be incredibly helpful. If you want to make quick profits on your investments, then a trading broker is your best bet. They should be able to negotiate cheaper execution fees as in theory, you should be carrying out more trades than other investors.
If you are in it for the long haul, then a buy and hold broker is more likely to be the broker type for you. They will look for investments that have long-term returns, possibly through dividends or slow but regular growth, and attempt to steer your portfolio towards that. Both of these are incredibly helpful to investors who are not experienced in either method of trading.