What To Look Out For In A Credible Stockbroking Firm Pt3

© John Efetobor. All Rights Reserved

A credible stockbroking firm is pride to any nation. Stockboking firms primarily were designed to be a vital platform upon which investors should be able to create wealth from the capital market. A stockbroking firm worth its salt ought to be where investors should receive information and enlightenment about stock investment. Stock firms are designed to assist their clients pick stocks for investment.

Unfortunately, stockbroking firms have abdicated these important functions. Many firms have been distracted from these primary functions and are now pursuing other activities that have no bearing on their visions and missions. That is why it has become necessary for you to do a thorough research before pitching your tent with any firm.

Guiding Lights To Look Out for Includes:

Customer General Satisfaction: Are clients satisfied with the services they are receiving, in other words, do you observe clients dissatisfaction whenever you are around to do business. It is not difficult to find out, by the time you spend 10-20 minutes in the reception hall of an average firm will tell you a lot. You will either find very satisfied and cheerful customers or disgruntled and nagging clients venting their disappointment because of the inability of the firm to satisfactorily meet their expectations.

Integrity And Honesty: Check the past performance of the firm.
Have the firm been involved with malpractices and untoward activities? The easiest way to know is to find out if the firm has any court cases or litigation. You can ask the stockbroker to give you a list of those who currently do business with it for you to confirm the caliber of clients they are attending to, if you cannot find any credible investor in the list given to you, please think twice. You must also keep an eye on newspaper reports on the firm. You can check the compliance department of the Securities and Exchange Commission (SEC) or by asking the appropriate departments of The Nigerian Stock Exchange.

Reach: You should check how widespread the reach of the stockbroking firm in terms of branches is especially for those who live outside Lagos. Does the firm have wide branch network around the country? Are these branches functional? Crosscheck to confirm. Ensure that you don’t transact business with any agent of the company outside Lagos without confirming his or her status with the head office. If the firm has functional and vibrant network of branches, It only shows how prosperous the firm is don’t you think?

Competent Research Department: How sound is the research department of the stockbroking firm you are patronizing. Remember, your stockbroking firm is supposed to be your backbone in terms of stock picks. For you to benefit from the huge profits that are available in the stock market the stockbroking firm must have a sound research department.


What is the qualification and competence of those running the research department of the firm, how many people have benefited from their recommendations in the past? Are they competent in stocks analysis?


If from your investigations, you have any reason or reasons to doubt the credibility of the stockbroking firm, I suggest you look somewhere else for your peace of mind as far as investing is concerned.