How To Pick Your Brokerage Company
There are many brokerage firms available in the market to choose from. It is the brokerage firm which helps you open your account and makes it possible for you to invest and transact on Pakistan Stock Exchange (PSX). There are more than 200 brokerage firms active in Pakistan who can help you invest on the Stock Exchange.
But the question arises: how to select the right brokerage firm for yourself amongst the many firms available to choose from? The first and foremost rule is to keep your perspective in sight; You can shortlist a number of firms from the list of stock-brokers/ TREC holders available on PSX website (https://www.psx.com.pk/psx/resources-and-tools/TREC-Holders)* based on your preferences and then select the firm that most suits your needs. The criteria you may use to select your brokerage firm could be based upon:
= Ease of communication & understanding of your defined investment objectives.= Quality of investment advice.
= Availability of research for choosing stocks and sectors.
= Availability of online trading facility.
= Provision of trade confirmations.
= Brokerage charges levied.
= Physical proximity to your work-place or residence.
= Possibility to courier your account related documents to your address by the brokerage firm.
These and other value-added functions provided by the firms may be the deciding factors weighing in on your selection of the right firm for yourself. Keep in mind that the nature of your relationship with your stock-broker is of utmost importance as it covers the aspects of trust, understanding, and sensitivity to your investment needs. It involves money matters, so the basic element of trust and understanding is of undeniable significance.
You may want to explore the websites of your shortlisted firms to help you make a decision, apart from, ofcourse, the necessity to talk to the stock-brokers personally. See if they provide any brochures or other literature to help you gain a better understanding of the work ethic and operational style of the stock-broker. Read through the list of the brokerage firms and their branches and see which is more suitable to you in terms of accessibility and proximity to your residence or place of work. The list of these companies and their branches is available on the PSX website (https://www.psx.com.pk/psx/themes/psx/uploads/list-of-brokerage-firms-20-03-2019.pdf
Another criterion that can help you select your firm is the Credit Rating that they hold from Rating Agencies such as JCR-VIS and PACRA. The list of companies and their rating is available on the PSX website for your reference (https://www.psx.com.pk/psx/resources-and-tools/investors/credit-rating-report).
It is also important to see whether the brokerage firms are clear of any regulatory issues or suspension notices issued against them based on any operational oversights or offences on their part in the past or present. The status of these firms can be checked by the available list of brokerage firms as mentioned earlier*. Furthermore, their past activity with regard to investors can be gauged by any Investors Complaints lodged against them. This information is available on the PSX website (https://www.psx.com.pk/psx/resources-and-tools/investors/investors-complaints).
It is your duty to take responsibility of your account and your investment and make sure that you select the right stock-broker to meet your investment needs.