When it comes to getting your financial future in order, the right broker is essential to have on
Which industry?
The term “broker” is something of an umbrella term. Many Australians who think of brokers might immediately think of suited and booted stockbrokers, or others who work in professional environments. These kinds of brokers still do exist in major financial centres such as Melbourne or Sydney, but the terms are broader now – and there are other types of broker, too. Mortgage brokers, for example, have become popular in recent years. With around 70% of Australian households owning or currently buying a home, mortgage brokers are often the first type of broker with whom the average Australian investor might come into contact.
And then there are also brokers of traditional financial instruments, such as stocks and shares, which are organisations or platform-based rather than individual people. Websites which offer online brokerage services tend to be self-service, but they can be very advanced in their functions. In some circumstances, you may even get a broker that can automate many parts of the investment process. With so many options out there, here’s how to narrow down the lists and to find the right broker for you.
Fees and prices
The pricing structures used by different brokers can vary, and it’s important to be knowledgeable about them before making a decision. Some brokers charge a fixed fee upfront, which means that if you want to use their services you will need to pay before you receive any services or benefits. Others charge fees which are proportionate to the services rendered. Different options work for different individuals, and whether or not it will work for you can vary. You will need to do the maths to work out which route is most cost effective for you.
Avoiding fraud
It’s also
worth remembering, however, that not all brokers have your best interests at
heart. On some occasions, you may find a broker that looks from the outside to
be trustworthy. They may have a flashy website, for example, and they may
appear to provide a wide range of different services. But in reality, what you
read online is not always the case in fact. Established big name brokers like Plus 500 are widely known to be
trustworthy, however, others are less well known and thorough research should
be carried out before you commit to using one of the smaller or newer
companies.
How can you act to avoid investing your hard-earned cash with a broker that might prove to be unreliable? First off, it’s important to be sure that you are signed up to a broker who is registered to operate in Australia. If you’re unsure about whether or not that is the case, it is worth checking this out with the relevant regulatory body for the sector. Usually, this body will be the Australian Securities and Investments Commission (ASIC). Remember to check on ASIC’s site rather than the broker’s site. A broker can claim to be registered with this Commission, but in fact might not be. And it’s also well worth keeping an eye on the Scamwatch website from the Competition and Consumer Commission to ensure that none of the brokers you intend to work with have been featured on there.
Brokers are a key part of the Australian financial system and without them the system would potentially fall apart. They act as connectors, bringing together individuals looking to make investments with providers willing to offer the service. Falling victim to fraud or a bad fee structure is certainly possible, though, while if you don’t fully understand the nature of brokers then you might not choose the right one. But by following the advice outlined above, you can find the right broker for your purposes that will help to get your financial future secure by advising on investments that will show the best returns.
