If trying to find and select an online stock broker platform has got your knickers in a knot, then you’re going to love this article.I get loads of questions from people who have read The Wealth Chef book and are ready to implement the Expand Your Dough recipe, asking how to select an online broker account.
Wading through google searches, clicking on endless web links and all the financial jargon can be pretty overwhelming, damn frustrating and can stop you and your wonderful wealth journey in your tracks. So I’ve put together a guide to help you select and open your own online broker, and get that money working hard for you.
First thing is beware of analysis paralysis – once you’ve narrowed down your online broker choice based on the criteria below – take action.
An okay broker that gives you the investment pots you need, has reasonable costs and enables you to invest in index trackers so you actually invest and learn by doing it, is 1000% better than staying stuck on the outside dithering over your choice.
If for some reason you aren’t happy with your chosen online broker you can always move at a later stage. Getting started is the first step in creating your freedom.
Secondly you want an online broker account that lets you hold the different investment pots available to you in your country on one platform. See the country specific points below.
Thirdly your online broker must also allow you to invest in unit trust (mutual funds) and direct stocks and shares. Your index trackers come in two forms – unit trust type index trackers and Exchange Traded Fund (ETF) Index trackers. You want to be able to buy both.
Use the information and links below to go and compare the online brokers available to you in your country, select one and get going.
UK Online broker comparison – You want an online stock broker account where you can open an Individual Savings Account (ISA), Self Invested Personal Pension (SIPP) and a dealing account (also called a trading account) on one platform. This keeps things simple and lets you manage your investments effectively.
USA Online broker comparison – You want an online stock broker account where you can open a ROTH, IRA (Individual Retirement Account), traditional IRA, be able to roll over a 401k and have a straight dealing account on one platform and invest in unit trust (mutual funds) and direct stocks and shares. In the USA – my two favorite online brokers are Scottrade and TD Ameritrade.
SOUTH AFRICA Online broker comparison– okay you South Africans – it’s a little bit different for you. Unfortunately South Africa doesn’t yet have the selection and flexibility of the bigger UK and USA markets. In South Africa there is an ETF investment platform called etfSA and their site is www.etfsa.co.za which enables you to invest in ETF type index trackers at very low costs. You can also open a RA (Retirement Annuity) and a Tax Free Savings Account (TFSA) through them and invest in ETF’s in all your investment pots. You can also transfer any existing RA to this platform. The etfSA customer support is great and it is by far the best value for money.
CANADA Online broker comparison– You want an online stock broker account where you can open a Registered Retirement Savings Plan (RRSP), Tax Free Savings Account (TFSA), and a Registered Education Savings Plan (RESP) – if you are investing for kids education – and have a straight dealing account on one platform and invest in unit trust (mutual funds) and direct stocks and shares. Scotia iTrade is a solid platform which ticks these boxes. But do your research with the help of this article.
AUSTRALIA Online broker comparison – You want an online broker where you can open a straight dealing account and a Self-Managed Super Fund account (SMSF) and invest in unit trust (mutual funds) and direct stocks and shares. I believe your choice in Oz as investors (not traders) is between Commsec and Etrade.
We have Wealth Chef’s in the making from 53 different countries – so let me know in the comments below where you are, and what online broker you have found in your country that ticks these boxes.
Let me know too if you are struggling to find a suitable broker in your country and I’ll see what I can find for you.