Online Broking: Things You Must Keep In Mind Before You Do
More than 1/4th of the US population of adults trade online. This is about 54 million adults, the Aite group points out. By 2018, the report says desktop and web based trading will fall sharply, with mobile on the rise. An under 35 audience is expected to go online and trade.
"To properly serve the segments of the US retail trading market that trade the most often and have the most assets, brokerage firms should understand and act upon the hot buttons of traders under the age of 35, not those of the 40-somethings who today receive inordinate attention," says Javier Paz, senior analyst in Wealth Management at Aite Group. (Source: AITE group.com)
As a customer of online broking service, it would be worthwhile to keep some points in mind.
Changing brokers is easy:
Unlike earlier where forms would have to be submitted in triplicate in order to change brokers, it is quite easy now. A request placed online will get the job done, with funds being transferred electronically.
If you are a small investor who would not like to shell out big brokerage fees then robo advisors could be the answer for you. Algorithmic based softwares manage portfolios with no human interference and are called robo advisors.
Some companies use robo advisors for specific pre-sorted funds only. Take a look at these parameters before you sign up for a robo advisor - cost, type of custody (custodian or brokerages), account type (for example are they tax-deductible for self-employed), investment flexibility (pre-fixed choices or open), taxes (tax loss harvesting features) and stocks (do they allow investing in individual stocks).
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