How Smart Investors Select A Smart Stockbroker?

Mukunda Tripathee

Investors invest their savings into different stocks available in the stock market with the aim of a good return. Investing in stocks is a very conclusive matter, where investors should analyze the sector technically and fundamentally. Thus, investors may not have perfect ideas to perform securities transactions on one side. Likewise, on the other side investor should take the support of stockbrokers to perform securities transactions through the secondary market.

This is a competitive business age where lots of competitors are competing in the market. Investors have become more intelligent nowadays. So, they expect a chunk of additional facilities along with the basic services provided by stockbrokers. To win the market, charm the investors, and save the perpetual existence of the company in long run, stockbrokers should offer a variety of additional services along with the regular and common types of services to their valued investors.

A smart investor knows, only a smart broker can push toward the right path and explore more investment alternatives in a distinguished way.

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Trust and transparency of stockbrokers reflect the reputation. So, stockbrokers should be trusted by investors. For the entrustment in the eyes of investors, Stockbroker should have lots of experience of related jobs, a good relationship with investors, the financial soundness of company, accountability, and responsibility towards investors, and commitment and dedications towards assigned jobs. If so, only investors will visit the stockbrokers’ time and again for the services and recommend them to their peers and relatives too.


This is the age of digitization. Thus, all the activities of the Stockbroker should be digitized so that stocks related tasks can be performed through an electronic system. Because of different motives, investors cannot always be physically present to perform securities transactions on stockbrokers’ floors. Investors prefer to trade in securities staying in a place through his/her own Laptop. So, automatization and digitization in security-related tasks are quite essential nowadays because of advancement in technology, business or lack of time, varieties of investment alternatives, the physical distance of the destination, universal investment opportunities.

Range of services

A stockbroker should show uniqueness in his market to be a market winner by being different from the competitors. Here is an intelligent question to be answered by a stockbroker, to take some types of services, why an investor should visit you rather than visiting his/her nearby stockbrokers. The answer could be-a range of services offered to you i.e. multiple investment alternatives, free of cost, quick response, immediate fund transfer, timely address of the sales and purchase order, faultless work, and so on.

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Quality of services

The quality of service of stockbrokers impresses the investor to visit time and again for the service in long run. The stockbroker must have adequate expert manpower, a fully equipped office, full digitization and automatization of web-based secure transactions, proper guidance, faultless technical and fundamental interpretation and analysis of securities, proper and near to correct future projections, and so on. This shows the quality and intellectualness of a stockbroker and its services. Quality of services develop a trustworthy environment in a broker firm and make transparency in transactions.

Cost Economy

Investors have become more smart, intelligent, and cost calculative. Likewise, on the other side, lots of alternatives are available in the market. Thus, it becomes more crucial for a stockbroker to determine the cost related to securities transactions. However, the case of the stockbroker commission in Nepal is determined by SEBON. Recently stockbroker commission is revised, which is highest 0.4 percent to lowest 0.27 percent based on the transaction amount. To attract investors, stockbrokers should provide a trading service at a competitive rate. If possible, sometimes they should offer free on cost or discount for some kinds of services.

Related: Stock Brokers’ Commission Rates In Nepal 


Investors and stockbrokers both are market players. In the absence of one other is incomplete. Thus, both investors and stockbrokers should become smarter and more intelligent. Both are doing business for a good return. There should be a reasonable return to investors and stockbrokers as well. Thus, investors should select smart stockbrokers for qualitative services at a reasonable cost. Similarly, stockbrokers shall create a trustworthy environment for sustainable development and perpetual existence in marker over the competition.

(Mr. Mukunda Tripathee is currently working in the banking sector.)

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