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How do I choose a broker?

By Phil Boeyen, ShareChat Business News Editor

Wednesday 23rd January 2002

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Q: I have never bought shares before and would appreciate your advice on the best way to choose a broker?

A: Firstly, you should choose a broker who is a member of the NZSE. That way you know that your broker meets the educational requirements set by the NZSE. They are also required to have researched with due care any advice which they offer you. Anyone in NZ can obtain the required references, pass a police check, pay the fee and be granted a sharebroker licence, but only members of the NZSE are required to comply with NZSE Rules and Regulations.

Brokers offer their clients a service, so choose a broker that offers the sort of services you, as an investor, think you might need. If you would like advice and a helping hand in choosing what sort of shares to buy then you need a full service broker. Explain what you want from your investment and a full service broker will offer their advice on what they believe will best suit your needs whether you are investing for income, capital growth or both.

Retail brokers don't offer advice, but they do have cheaper brokerage. Many brokers offer an Internet trading service that you can use from anywhere at anytime. Internet trading is quick and you can do it when it's convenient for you. Remember that Internet trading is still trading and your orders are treated in the same way as if you'd rung your broker. It is easy to spend more than you'd wanted to because it doesn't seem 'real'.

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