2. Determine your investing priorities
Different brokerage firms have different strengths, and your investing priorities will help you determine which strengths are better for you.
Some brokers, for instance, are better for people who want to trade now but don't have much money to start with, while others cater to investors with a higher net worth. Some brokers focus on full-featured desktop trading platforms for experienced traders, while others are designed for mobile users who want quick and simple trades. Some are no-frills and charge low or no fees, while others may cost more but have advanced tools or provide better customer support.
There's also a big difference in the types of assets different brokerage firms focus on. For example, some have a huge selection of inexpensive exchange-traded funds (ETFs) and no-load mutual funds, while others focus on cryptocurrency trading -- which many mainstream brokers still don't offer. You'll want to think about what types of assets you're hoping to trade and look for a brokerage firm that will allow access to all of them.
Think about the type of experience you want to have and what's most important to you. When you approach brokerage firms with your priorities firmly in mind, it's easier to find a good match.
Since different brokerage firms cater to investors of different levels and priorities, their platforms and accounts will likewise be designed with specific investors in mind.
For instance, if you're a beginner investor, then you may have different needs when it comes to customer education and trading support. You may want access to webinars and educational articles that teach the basics of investing, or you may be interested in screeners that make it really easy to pick out different assets to buy.
Likewise, if you're an advanced investor then you're likely more interested in charting features, expert analysis, and in-depth company research.
Think about where you're starting out -- and how much time you plan to spend devoting yourself to researching investments -- so you can find a brokerage that offers the tools and materials you're looking for.
4. Compare costs and convenience
Many of the best brokerage firms today offer commission-free trades on stocks and ETFs. However, it's still important to look at all of the broker's fees first, as it may charge fees for other services, such as transferring money from one brokerage account to another or closing your account altogether.
While looking at costs, convenience is another factor to consider. For example, if you'd rather sit down and talk to an expert face to face, check to see if the brokerage firm has a network of brick-and-mortar offices -- and, if so, make sure there's one near you. Banks may also offer brokerage accounts to their clients, which could be convenient if you'd like to have your investments in the same place as your savings. In some cases, it might be worthwhile to pay for a full-service broker if it means getting the service you want.
Finally, you want to make sure you are comfortable navigating the brokerage firm's trading platform to buy and sell assets.
Most brokers will let you download their investment app or try out their desktop software without transferring money into the account. Consider spending some time playing with the platforms each broker you're interested in offers before you make your final choice.
Compare brokerage firms before deciding
Before making a final decision, you may need to look around, evaluate the pros and cons of different firms, and compare your favorites. It's okay to spend some time on this, especially since some brokers charge a fee when you cancel an account.
By following these five steps, you should end up with a brokerage firm that makes investing easy and gives you access to the type of account and assets you're looking for.
