A trading account at a brokerage firm allows you to buy and sell a full range of securities available on the open market, but choose your broker carefully.
Instructions
Difficulty: Moderately Easy
Things You’ll Need:
• Financial Calculator
• Brokerage Accounts
• Paper And Pencils
• Personal Financial Software
Gathering Information
Step1
Call several major brokerage firms in your area and ask for the broker-of-the-day, duty broker or new accounts broker. Be ready to take careful notes of each conversation.
Step2
Ask each broker about the firm’s minimum deposit for opening a trading-only or cash account and what account features are offered (for example, the ability to trade on margin).
Step3
Inquire about account fees, broker compensation and whether the firm provides any online services. Ask for brochures.
Step4
Thoroughly discuss what costs, such as commissions, are negotiable. This is important!
Choosing the Brokerage
Step1
Review the information you have gathered and rank the top three brokerage firms.
Step2
Call the brokers, top-ranked firm first, and make appointments to visit their offices during market hours.
Step3
Tour each office and note the availability of research materials, a customer computer terminal and a cashier station for processing deposits and checks.
Step4
Choose the firm that you feel offers the most resources and services that you will use for the best cost.
Opening the Account
Step1
Take home the documents requiring your signature for opening an account and carefully read all the terms and conditions to which you will be agreeing.
Step2
Open your account only after having all your questions answered and making sure you understand critical information regarding your account’s cost, features and limitations.
Step3
Get copies of all signed documents relating to your account
Tips & Warnings
• Deposits in the money market funds of brokerage accounts get better returns than bank saving accounts, but they are not FDIC-insured.
• Traditional brokers are compensated for assets under management and trading activity. If you maintain an account with a low balance and few trades, don’t expect much attention from your broker.
• Check your brokerage statements carefully and correct errors immediately to avoid possible tax-reporting problems later.
• Don’t depend entirely on brokerage record keeping. Have a system for filing all brokerage statements, confirmations and related documents

eHow Article: How to Open a Trading Account at a Brokerage Firm.
eHow Personal Finance Editor

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Filed under: Guest • Stock Market

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