How to Choose a UK Stock Broker

This work has considered the important factors to consider while choosing a stock broker in the UK today.

Introduction 

Stock brokers perform different roles for their clients – ranging from order executions to trading on behalf of their clients. Some are known for providing financial advice to guide their traders in making decisions, while the rest provide support and rich educational material to make trading easy for their clients. It is therefore very necessary for any prospective stock trader in the UK to understand what services he desires, to help him in deciding which of the is the best UK stock broker for him.

Whichever type of broker one wants, it is equally important to ensure that such broker complies with the regulatory demands and fulfills the client’s expectations. This work is therefore an invaluable guide for traders to understand the important factors to consider while choosing a stock broker in the UK today. 

Meaning of UK Stock Broker

A UK Stock Broker is a financial service provider that enables UK residents to buy and sell various stocks listed on the London Stock Exchange (LSE). Stock brokers in the UK provide a wide range of services for their registered traders ranging from trading on their behalf, providing financial advice, executing pending orders, etc. Without stock brokers, it will be difficult for individuals to trade stocks from the comfort of their homes in the UK today. 

Types of stock brokers in the UK today 

• Full-Service Brokers: This type of broker performs virtually all the tasks for the trader such as account management, providing financial advice, carrying out research, and making decisions on behalf of the client. However, full-service brokers are known to charge some commissions for the services they perform on behalf of their clients. 

• Discount Broker: This type of broker allows clients to take decisions themselves on which stocks to buy or sell. However, they charge very low commissions for using their platforms. 

• CFD Brokers: CFD brokers provide attractive leverage for traders to maximize their profits while trading on their platforms.

Factors to consider while choosing a UK Stock Broker

• Flexibility: UK Stock brokers are expected to be flexible to enable them meet the various demands of their clients. Flexibility entails being sensitive to the client’s needs and adjusting their trading conditions to suit them. 

• Convenience: All stock brokers in the UK are expected to make their platforms very convenient and easy for the clients to use. They are to make their platforms simple and readily accessible for traders. 

• Services Fees: An important characteristic that marks a good stock broker in the UK today is the amount they charge as commissions for executing various orders placed by clients. Charging higher fees reduces the client’s profits. Therefore only brokers with low cost for using their platforms are best for trading. 

• Regulation: Stock brokers in the UK are regulated by the Financial Conduct Authority (FCA). Traders should ensure that their selected stock brokers are duly registered with this body to ensure maximum security for their funds. All other brokers operating in the UK without proper registration with the FCA  could be seen as illegal dealers.

• Leverage for Trading: Most traders who do not have enough funds for trading rely on the leverage provided by brokers to maximize their profits. It is therefore very necessary for all UK stock brokers to provide enough leverage to help traders maximize their profits while using their platform. 

• Multiple Stocks: Traders have varied stocks as their favorites. Hence,  all stock brokers in the UK are expected to provide a wide range of stocks already listed on the London Stock Exchange (LSE) market for the traders to make their choice.

• Track Record of excellence: Brokers with a historical strong record of excellence are most recommended for stock trading in the UK today. This category of brokers understands the client’s needs and has established proper solutions to solve them on their platforms.

• Client Support: Often stock traders  encountered one problem or another while using the broker’s platform.  It is therefore very necessary that all stock brokers in the UK must establish an efficient customer support service system to assist clients at all times.