The role stock brokers have evolved in a big way over the last few years. Now brokers are not just here to buy or sell stocks on behalf of their clients. They play a bigger role in helping an investor wade through whole investment process; providing research based advice on stocks to helping client to invest in alternative assets; and subscribing to IPOs and mutual funds schemes.
Apart from this, brokers also offer financing facility for investors who are looking to take leverage position.
So, the traditional brokers have transformed themselves into a one-stop investment solution provider.
Let us now look at some of the important roles the new age stock broker plays in a client’s investment journey.
Buying & Selling stocks
This is the primary function of a broker. Brokers act as an intermediary for their clients totransact on a stock exchange. He buys and sells stocks for individuals who have signed up with him as clients.
With the onset of on-line trading facilities investors could directly execute trades on the trading platform offered by the brokerage house.
After completion of the transaction, brokers forward information related to the trade to their clients and make transfer arrangement for the stocks purchased. And also send the account details and margin requirements.
Research & Advice
Most of the broking houses have set up in-house research team that scans companies and stocks as well as analyse the macro-economic scenario that impacts the stock market. With the inputs from the research team, brokerage house puts buy or sell recommendation on stocks.
Brokers also have technical analysts who would provide market trends and intra-day trading tips. They send out news and other alerts on a continuous basis. Brokers also conduct investor education programmes to help improve their clients’ knowledge about investing in the markets.
Personalised service:Most broking houses assign a relationship manger to interact with the client who would act as an advisor. Relationship mangers advise their clients about when to make transactions and guide them about what to look for in the market dealings.
They would advise clients on putting stop-loss especially when they are making intra-day trades. They monitor client’s portfolio and provide timely advices to them.
Stock brokers are well capitalised these days. It means they have a strong balance sheet with high equity and debt on books. Stock exchanges monitor the extent to which brokers are lending in line with their net worth. As a result, many large broking houses provide financing facilities to clients who are looking to take leverage positions. This means borrow for trading.Funding is mostly done by the NBFC arm of the brokerage house. Clients are allowed to take a position in the market after paying the margin amount. In most cases, investorsare allowed to trade with a 50% margin.
Invest in other asset class
Apart from investing in stocks, brokers also help you to invest in other assets classes like commodities, gold ETFs and mutual fund products. They also help you to investment in initial public offerings (IPO) of companies.
Brokers have transformed themselves into a one-stop investment solution provider, assisting their clients to successfully achieve their financial goals. In case you are new to stock trading and wondering who will help you in stock trading then there are many leading share brokers in India, who offer their services. you just need to get in touch with them and start trading.