Bad

There are bad stock brokers, and there are BAD stock brokers. If you’re interested in investing in the Stock Market, it’s very important that you recognize and avoid stock brokers who won’t be of any use to you.

There are many ways to identify bad stock brokers, as well as many kinds of bad stock brokers. Many situations are taken into consideration when analyzing a broker’s moves or motives.

The first thing you have to realize is the obvious: Stock brokers don’t work for free. They’re not angels sent from above whose sole purpose is to help you become rich without regard for their personal well-being. They also have to make a living and that’s why they charge you for their services.

When choosing a broker, it is your duty to closely inspect all the details, especially those that pertain to money matters. Some brokers may offer low commissions for their services, only for you to be charged high in the end. Perhaps you didn’t notice the fine print? Hidden charges are not uncommon and you should watch out for those. Stock brokers can get away with hidden charges because they don’t violate any laws, but it’s definitely not good for your pocket.

Transparency is another matter. Some stock brokers have the tendency not to disclose their fees to the clients. Worse, they may even buy investments which are inappropriate for the customer or engage in unauthorized trading in the customer’s behalf. These are the BAD stock brokers. Although at that time, they may have been acting in your best interests, thinking that their moves would yield good returns, in the end it boils down to whether they had your consent or not. Having these kind of brokers is like being in a casino. You may win a few times, but in the end you’ll end up with nothing.

The worst kind of broker, the one that you should really stay away from, is the type who calls and offers you “a great tip” based on “insider information”. These brokers are just looking for a quick buck and are definitely not watching out for you. They have vested interests… and those interests do not include you.

Then there’s the case of the incompetent broker. These brokers are usually the young-bloods. Lack of experience can lead to bad judgement calls, which leads to loss on your part.

The best way for you to avoid bad stock brokers is to do your research. Find out as much as you can about a particular broker before deciding on whether you want to work with him/her/them or not.

Finally, know your rights. Even the best brokers may commit mistakes from time to time. And when they do, knowing your rights will help you determine whether you can get your money back or not. Most importantly, knowing your rights will help you decide on whether you should stick to your broker or look elsewhere.