Five Questions (5) to Ask Yourself WHEN CHOOSING A BROKER For Stocks or Bonds

Don’t blindly pick your broker. These 5 key questions will help you choose the right one for your investments.

You have decided to invest in shares already bonds but just discovered that,

…you will need a broker as an agent for your transactions.

If this is you, then this open letter is for you!

The stock market (DSE: Dar-es-Salaam Stock Exchange), just like Kariakoo, is a market. Just that, it deals with cash products.

Brokers meet to buy and sell stocks and bonds through auctions.

DSE is active from Monday to Friday, from 10am to 4pm. The market closes on holidays.

Before choosing a broker it is important to decide what asset to buy or sell but also…

the products which the broker sells and buys on behalf of his customers.

In short, get the correct understanding of the asset you want to invest in before looking for a broker.

Remember, a broker;

✔ Buys and sells stocks and bonds on your behalf

✔ Does not own stocks or bonds

✔ Is paid commission for every trade

✔ Does not have any ‘risk’ in the market because he is just an agent

✔ Sends you information about your completed stock transactions

✔ Has account information on the stocks or bonds you purchased.

Investment Broker Tips

Having the answers to these five questions will save you time,

on how to choose a broker in Tanzania.

1. Is the broker Licensed?

The broker should be recognized by investment authorities, such as

the DSE and the Capital Markets and Securities Authority ‘CMSA’.

You can find a list of licensed ‘brokers’ on the DSE website.

2. Does the broker have enough experience?

A broker that has been in business for a long time, has been exposed to different economic times nationally and globally,

and therefore has a good history of profits and losses in the financial market.

This broker has likely encountered many challenges, so you can get realistic advice on the questions you ask.

3. How are the Service Charges for managing my account?

Brokers get a commission fee from every transaction they make. 

And as you know, commission for them is a cost for you, depending on the transaction amount when you buy stocks and bonds.

You can compare costs between different brokers by asking the percentage they charge as a brokerage fee (Brokerage Commission).

Next question is,

  4. Does the broker have Good Customer Service?

Find out if they serve their customers with speed and urgency. 

If you are a part of online personal finance groups in platforms like Whatsapp,

 it will be easy for you to get these answers from other investors.
A good broker must have easily reachable numbers when customers need help.

5. Does the broker do Market Research of the Financial Markets?

A good broker does continuous research and regularly reports on the happenings in the market for the financial assets they deal with.

You can start with just a few names and check out websites and social media pages like Instagram.

Download a FREE tracker to monitor your liquid investments as illustrated below;

Stay updated on our Instagram for free content, and click the button below to communicate with us on WhatsApp.

PS:

If you don’t like the service of your first broker, you can always change to another broker for better service.

The important thing is to start. Do not hesitate to start!

Money-ly Yours,

Gracing Money!

References:

1] Frequently Asked Questions About Dar-es-Salaam Stock Exchange Document

2] Dar-es-Salaam Stock Exchange, dse.co.tz

Follow us on Socials

• WhatsApp
• Instagram

Read More Blog Posts